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Textile Industry

Volume 498: debated on Wednesday 26 March 1952

The text on this page has been created from Hansard archive content, it may contain typographical errors.

10.8 p.m.

I was saying, when the House passed to other business, that the recession in the textile industry is worldwide, and all the work that has been put in by way of modernising our mills and increasing the efficiency of our industry in recent years has been of no avail to stop it. I want to suggest to the Government one or two ways in which they can be helpful. First of all, as regards Purchase Tax—[Interruption.]

Order. I must ask hon. Gentlemen below the Bar to pass out of the Chamber quietly.

An alteration in Purchase Tax is essential. The past scheme towards the end was holding up production, because nobody knew on what goods it would in future be placed, but the new scheme will have some unforeseen results. I think they must have been unforeseen. It will hit very severely several classes of the better quality goods which Lanachire has always been able to export and on which she so much depends for success, such as best quality shirts and furnishings. A large number of these were previously in the Utility scheme and were sold free of tax. Now they will pay quite a high rate of tax, and that will be a definite hindrance to their export sales, especially in the American market. That may not have been realised, but it is having a serious result. The leaders of the cotton industry on all sides urge that the Purchase Tax on cotton and rayon goods shall be abolished altogether. This has been suggested already by hon. Members in all parts of the House, and I urge most earnestly that it should be done.

There will be a further shrinkage of trade if it is not done, and it will be a definite hindrance to the increase of our export trade. That shrinkage will cause the Chancellor further losses in taxation from the lowering of profits in the industry. Also it might cost a great deal in unemployment benefit, so serious is the position. On the other hand, the value of "D", as we call it, could be raised, or the rate of Purchase Tax could be reduced; but neither of those two things will be sufficient to prevent a shrinkage in our export trade.

Another point is the question of Government contracts. We have heard from the President of the Board of Trade that he intends to do all he can in that direction, but there is a rumour in the North that a proportion of Government contracts, said to be 25 per cent., is to be placed with firms in the Development Areas. The cotton industry towns and villages have never been classed as Development Areas, but there are many towns and villages which are entirely dependent on this one industry. If the trade recession goes on, they will be worse hit than the Development Areas, and so I urge the Government to place their orders in Lancashire in adjacent cotton towns, and not to single out the Development Areas for these contracts, which it would be a help if the Government could place as soon as possible.

If one made a criticism of the previous Government, it would be that they placed too many orders for re-armament too quickly, so that they were at the height of the cotton boom and many of the orders had to be placed abroad. That was a pity, because if the orders had been more spaced they would have overlapped this situation and would have been able to fill a gap most usefully by diversion to our own mills. However, it is obviously too late to do very much in that direction.

Local authorities and county councils also can help by placing orders in this country rather than abroad. I mention this because recently the Lancashire County Council sent round to schools in their area a large quantity of tablecloths. They have ordained that school children in future shall have their meals at tables covered with cloths instead of with American cloth or something of that kind, but to the surprise of many schoolmasters and others in the school, these cloths, which have arrived in lengths of 36 yards, have stamped on them, "Chang Lu Weaving Company, Kowloon, Hong Kong" Undoubtedly, that is a British territory and it is important to maintain trade there, but it is a little unfortunate, to say the least, that these cloths should have arrived in recent weeks, when the position is so very bad and when they will certainly cause a good deal of dissatisfaction.

I want to mention one other matter. It is, perhaps, an unusual point and may not have been raised before. Recently, in some of the weekly and other papers, leading economists have been suggesting that textiles are no longer the first priority in Lancashire, that Lancashire is tending to become an engineering county, and that engineering should take priority. I ask the Government: are textiles still to be the first priority of Lancashire and the West Riding? It would be a tragedy if they were not, but undoubtedly the engineering industry there has increased greatly in recent years and is, of course, playing a vital part in the re-armament drive. Many new firms, especially smaller firms, have started in recent years, but Lancashire is still dependent, and has been built up, upon her textile industry, and I say without hesitation that it should still have first priority there.

To help the industry to maintain this first priority, help is needed by firms who are developing new ideas. There are some firms—perhaps, only one or two—who are developing these new ideas and new products. On their own initiative, they are specialising in certain lines which will play a very useful part in the future. They want support from the Government in dollars and in machinery.

These firms are having difficulty in importing from the United States and from Switzerland certain machinery which is vital to them in this new work, and they ask that the Government should not be so restrictive in considering the imports of this machinery. The Government should use more skill in discriminating between what is absolutely vital for the future, rather than the present tendency to refuse everything.

Certain types of synthetic materials should come in duty-free. These new products are being made for defence and for the export trade; 75 per cent. of the materials are being used in these two directions. There is laminated board for the insulation of machines, etc.; glass cloth, for which there is a big future, and fabric of various sorts, including fabric which has been used for the insoles of boots which our men are wearing in Korea.

Imports of synthetic yarn, for example, from the United States bear a duty of 35 per cent. This item is not manufactured here, and is not obtainable here. No harm could be done, therefore, by lowering the rate of duty. The duty of 35 per cent. is subject to a drawback of 9d. per lb., but this still leaves a duty of no less than 22 per cent., which goes to the Chancellor of the Exchequer.

These yarns are classed as artificial silk, I understand, because nobody knows in what other category to place them. But surely, if they were artificial silk, they should bear some slight resemblance to real silk, which always has been the criterion. Although this synthetic yarn bears no resemblance whatever to artificial silk, it pays the same import duty because it is classified under the 1925 Act, which is still in use by the Customs and Excise, an Act which certainly has amendments but which was originally passed over a quarter of a century ago. I think that Act wants revising and new categories placed in it to bring it up-to-date with modern inventions and modern requirements. There should be a review of the tax on these basic synthetic products for which there will be great use in the future.

Did I understand the hon. Member to say that no synthetic yarn is made in this country?

Not of the nature used in the products of which I am speaking: it is a special plastic yarn.

The Government can help a great deal in these and other directions, which will probably be suggested by other hon. Members. We hope and believe that this is only a temporary recession in trade. The industry, incidentally, is much smaller than it was; there are 700,000 fewer spindles than in 1950, and it should therefore make a quicker recovery. There is no spirit of defeat in Lancashire, but we do rely on the Government for all the assistance they can provide. The duty of a Government is, surely, not to interfere too much with industry, but to guide and help wherever and whenever it can, especially at a time like this. We, as Members for these areas, look for all the help the Government can give us, and we do not think we shall look in vain.

10.23 p.m.

When my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) was making his very well balanced opening speech, I thought that the general consensus of opinion on both sides of the House was very much with him in respect of the points of view he was putting before the House. I feel that the speech of the President of the Board of Trade must have been received on both sides with considerable disappointment, because we are all deeply concerned about the growth of unemployment in Lancashire and Yorkshire arising from the difficult circumstances confronting the textile industry.

We must, of necessity, be conscious of the fact that the prosperity of this country has in the past been largely based on the prosperity of the wool and cotton textile industry. If we get a measure of depression in either cotton or wool textile, it will undoubtedly mean poverty and destitution in the homes of the operatives in all parts of the country.

I sometimes think we do not quite appreciate the importance of the problem which is developing. I sometimes wonder whether the present set-up of the Board of Trade is really modern enough to meet the modern requirements of industry, or whether some new organisation which can speedily apply new remedies should be created by consultation on both sides of the House.

Hon. Members representing the City of Bradford have received very serious representations from the industry respecting the development of unemployment. I wish to read a few extracts from a letter I received from one Bradford industrialist who is anxious that the points which be makes shall receive the consideration both of the President of the Board of Trade and of Parliament itself. I consider it important that in these debates, apart from expressing our own point of view, we should know what the industry is thinking and what remedies they consider ought to be applied in the present situation.

My correspondent is the director of a large textile firm in Bradford. I will give brief extracts from his letter. He writes:
"The restriction of trade imposed recently by several countries are in my view much more important than is generally appreciated. The unemployment in this area"—
that is, Bradford—
"is only just beginning. I fear it will soon be extremely serious. I cannot emphasise this enough."
I felt that the speech of the President of the Board of Trade this afternoon did not reveal that he felt this matter was likely to be extremely serious in the near future. My correspendent goes on:
"My own firm are now only paying 70 per cent. of last December's wages and our shortage of business is only just beginning to be felt."
He then goes on to deal with the various areas where the restriction of trade is seriously affecting the woollen textile industry, and his reference to Australia is as follows:
"The reduction of the total importation of wool cloth by four-fifths gives the trade a heavy blow. It also gives the customers in Australia a powerful aid to cancel orders placed at prices over double what they are today. This means enormous losses to manufacturers here or at best, difficulty in holding high-priced goods here for a long period, if ever they are taken up."
Then he refers to Switzerland as a small country, but nevertheless a country which is making its contribution, or was making it, towards helping our textile industry. He says of Switzerland:
"A smaller, but still important, hard currency market has put all wool textiles from England on licence for the last four months. Licences are most sparely given."
There, again, is an indication that in countries like Switzerland we are experiencing difficulties today which have not been experienced for many long years.

France, I presume, is an important importer of textiles. My correspondent's comments on France were:
"All imports are stopped pending the issue of a quota. I have it on good authority—"
and I should like the President of the Board of Trade to note this—
"that the French Government are delaying the issue of this quota unless pressure is applied by our authorities and will postpone the issue for a long time."
I appeal to the right hon. Gentleman to give us at an early date some encouragement to hope that his Department and the Government are determined to tackle this problem and are getting down to the job, because these difficulties will cause much distress in all the industrial areas of England, and especially in Lancashire, Cheshire and Yorkshire—the areas that laid the foundation of the greatness of our nation and made its prosperity possible.

The President of the Board of Trade should take the matter up with the Chancellor of the Exchequer and with the Government generally and should seek some way by which representations can be made to Australia and other countries who have decided to suspend their orders, and in some cases to cancel them. After all, Australia is part of the British Commonwealth of Nations, and I should have thought that the interests of the British workers in the textile industry were also the interests of the Commonwealth.

The conference of Commonwealth Ministers should have dealt with these problems and should have made sure that whatever restrictions Britain or Australia or any other country in the Commonwealth had to apply because of temporary financial difficulties, they would be applied in such a way as not to strike at the industries of the various countries concerned. I know there are difficulties.

Lancashire, Yorkshire and Cheshire have made it possible by their sheer industry for our nation to rise to influence and power throughout the world, and here in this House we do not appear to be alive to the serious nature of the present situation. We do not appear to be roused tonight by the dangers not only to our financial position but to the happiness and well-being of our people.

I think hon. Members representing constituencies in Lancashire, Yorkshire and Cheshire will agree when I say that we expect the Government to get down to this problem and bring forward a scheme which will prevent the serious dangers to which my correspondent referred. I hope the right hon. Gentle- man will convey to the Government the general feeling of the House and that something will be done to ensure that we do not go back to the old days of unemployment and destitution.

It is true that during the six years from 1945 we had no unemployment and very little competition. But at least we should see that there are no restrictions which can be removed by negotiation and by representation by the Board of Trade and the Chancellor of the Exchequer.

There is a general feeling in industry that the Government have not been bargaining hard enough. Correspondents have sent telegrams to the Bradford Members of Parliament saying that industry feels that the Government have not bargained hard enough in order to prevent Australia, France and the other countries cutting the importation of British textile goods. If that is so, it is a serious indictment upon the Government. I think this is far too serious to make a political point of it. It is a question of concern to both sides of the House whether or not these great industries are going to continue to play their part in the industrial activities of this nation and of the world.

In spite of the growing competition, I think the time has come when the President of the Board of Trade and his colleagues should get down to the problem. It may well be that consultations on both sides of the House, to try to reach some solution of this problem, will do a great service to this nation and to mankind.

10.37 p.m.

I am very pleased to follow the hon. Member for Bradford, East (Mr. McLeavy), inasmuch as he is the first and I am the second speaker from the back benches on either side of the House whose constituencies are primarily concerned with the wool textile industry. We have heard a great deal today about the problems of the cotton areas, and I do not want to suggest for one moment that their problem is not very grave indeed—graver than that of many of the wool textile areas. It has shot up much more quickly; it has been more sudden and the numbers concerned are infinitely greater.

In the case of the wool textile industry, it has been more gradual. The recession started almost a year ago. I hope the hon. Lady the Member for Blackburn, East (Mrs. Castle) will bear that in mind when she makes her political points on another occasion. The number of productive operatives in the wool textile trade 18 months ago was of the order of 170,000. In January this year it dropped to 149,000—a drop of over 20,000—and I am quite sure that the present situation is a good deal worse and probably down to the low level of September, 1947, when the industry got going again after the war.

The number of unemployed in the wool textile industry, including the officially recognised return of short-time on 14th January, was over 14,000. It is now most certainly greater. My own constituency of Shipley, which covers Bingley and Baildon, lies adjacent to Bradford and accounts for nearly one-tenth of that amount. If I include Bradford—because it is adjacent and the trade is intermixed, with often one firm with one process in one town and another process in the other—it accounts for 50 per cent. of the unemployment and short-time in the whole wool textile industry.

So I can understand and have great sympathy with the strength of the views expressed by the hon. Member for Bradford, East, although I do not quite agree with some of his peroration. I do not want to be pessimistic—I felt that the very fair speech of the hon. Member for Rossendale (Mr. Anthony Greenwood) was a little pessimistic—so let us hope that in the textile trade we can—I speak for the wool textile trade at the moment—return, for at any rate a fair share of the time, to at least normal demand at home and abroad; if we cannot reach the peaks which we have known in the last two years, at least normal proportions. It would be distressing if we could not meet the demand.

It would disastrous if acute recession yielded to such normal conditions that demand remained substantially unsatisfied because the industry had lost the labour force which it very painfully and painstakingly built up and trained since 1947. In the words of the Wool Textile Bulletin of December,
"In this task it will be difficult to succeed twice in so short a time."
I realise that in the national interest there has inevitably to be a fair measure of redeployment of labour to meet the national emergency, but anything of that nature which may be required has been exceeded in the areas which are predominantly textile.

I most decidedly associate myself with the hon. Member for Rossendale in his reference to the fact that in many textile areas many of the villages consist of one mill or two mills at the most and that the livelihood and happiness of all the people in the village stand or fall by the extent to which the mill or pair of mills can be kept going. There is no question of redeploying those people in some armament factory, at least in nine cases out of 10, and I hope that we shall all bear that in mind.

I take it that the hon. Member is talking about redeployment, not in the technical sense, but in the sense of all our people being transferred from the textile industry altogether or for a long period? Does he suggest that that is an involuntary or a planned act?

I am suggesting that it is inevitable that a certain measure of transfer of labour will take place in the national emergency. It will result automatically from the circumstances of the orders and the flow of materials. It has far exceeded anything which is desirable in the textile areas, and we must do all we can not to aggravate a situation which has developed in areas which are predominantly textile and in small communities which are built up on one aspect of an industry.

The textile trade—I think I can fairly speak for all of it here—consists of an independent type of people who do not expect the Government to go out and get orders for them and who are quite prepared to do that for themselves. But the channels must be opened.

I wish to refer hon. Members to one short passage in the annual report of the Bradford Chamber of Commerce, which was approved at the annual meeting yesterday. It says:
"Lack of quotas in some markets, refusal of import licences in others, and the unsettled conditions in the Middle East are among the factors that darken the outlook for increased exports, and in this connection the need for more effective bargaining when making trade agreements with countries which limit imports by quotas or other means has been brought to the notice of the President of the Board of Trade by a deputation from the Wool Export Group. Evidence is available that other countries when making trade agreements contrive to find outlets for their products to the detriment of United Kingdom exporters."
To that extent I again support the hon. Member for Bradford, East. In the old days the only barrier in many instances was the tariffs. Subsequently we got quantitative restrictions at an alarming rate, and in many cases there was total exclusion.

I do not myself think at times that Government bargaining has gained enough. My little experience goes back over many years. For over 12 years I served on the grand council of the F.B.I., and when I served on the particular committee dealing with this subject Presidents of the Board of Trade came and went, Governments changed, yet the same situation seemed to go on. There was a lack of appreciation of the fact that we are a great importing nation—and even with these import cuts of today we still are so—and have a reasonable right to demand some quid pro quo for the markets we give to other people. I think there are occasions when we could drive harder bargains.

I do not want hon. Gentlemen opposite to be sensitive on this point, for I am not making a political speech, nor am I claiming that this has necessarily happened over the past six years, but there have been occasions when the Foreign Office have had too much to say in business matters. I think we could drive better bargains.

I know the difficulties today in Latin America. The fact remains that exports now are roughly between one quarter and one hundredth—and in one case more than one hundredth—of what they were in 1937. What about Germany? I would like some help here from the President of the Board of Trade. Why did we get such a bad deal on the Anglo-German Agreement? What about Greece? Many hon. Gentlemen will remember that country as a traditional market for our textiles. Why can France drive a better bargain than us? Has there been a lack of liaison between the Ministry of Food and the President of the Board of Trade? Why can France insist on her textiles being taken in exchange for currants and raisins?

I do not want to be over-aggressive in this matter, but I do suggest that we are in a position to drive better bargains. I am advised that this is a sore point with many industrial firms in my part of the country. I naturally regret as much as any hon. Gentleman the unhappy circumstances of Australia. I do not want to cause any embarrassment, and certainly two blacks do not make a white, but I am sure everyone will have a little feeling and understanding of textile operatives in this country either unemployed or in fear of unemployment. They see on the one hand that Australia can cut four-fifths of her imports overnight, and on the other hand that we have negotiated reductions of imports which will continue to flow in to the detriment of the people in the textile mills.

I do not suggest two blacks make a white, but I want the sympathy and understanding of the House of the feeling in the minds of these people who see these imports still coming in and yet another member of the Commonwealth throws the whole thing off. I do not think everyone realises what that means to many firms. They felt they had a gilt-edged market and manufactured their stuff many months ahead of shipment. These orders are now likely to be cancelled, for it is unlikely that the high priced goods will be chosen for the export quota. I feel that these are important matters. I am glad the Member for Bradford East, read that letter from a constituent with mills in both our Parliamentary divisions. I, too, have a copy, and I hope some of the points will be borne in mind by the President of the Board of Trade.

I have now, I think, spoken for long enough, but I would emphasise my hope that we can get a little more hard bargaining. I hope, in that connection, that the President of the Board of Trade can really speed up and get his co-Ministers, if I may use the word, "cracking" on getting the re-armament orders to the textile industry. It would be a godsend if those orders could be got out quickly to the firms while the consumer resistance still remains, and the stocks are in the shops waiting to be liquidated.

I hope, too, that he will look again at the "D" scheme. I think that he takes a rather rosy view of the conversations which he had in Bradford and Leeds. I know perfectly well that he has interpreted the conversations aright, but I do say he has taken too optimistic a view; because, according to the information given me, there was no question that the people concerned had any conception that the so-called "D" line was going to be fixed at so low a level. I will not weary the House with examples, but would say that some of these are far too low. I sincerely hope that the Government, politics apart, will in their wisdom realise that this is a fact. A lifting of the "D" level is absolutely essential if, in fact, we are going to get the home market going and if we want to allow the smaller shopkeepers to keep in trade at all, because they cannot do so at the ridiculously low level of some of the "D" items.

The hon. Member for Rossendale spoke of reviewing the Purchase Tax in the light of these special circumstances, and I hope that we can do something which will help until some better negotiations can take place, or until currency arrangements become better able to help the export trade. Unless we have some action to liquify the solidity of the home market, while trying to get some effective measures for the export trade, it is only fair for those of us from the constituencies concerned to warn the House that unemployment may get out of hand.

10.54 p.m.

Having spent my life in Lancashire, there is one phrase which the President of the Board of Trade used this afternoon which struck me, and that was that the pre-war history of Lancashire's cotton industry, and its pre-war experience, had bitten hard into the hearts of the Lancashire people. What we have to do is to approach the problem in a more fundamental way than we have done so far.

This county has produced mountains of wealth for generations which has made ours a great industrial country. Lancashire was the birth-place of Britain's industrial development, and unless constructive and fundamental action is taken, Lancashire can become the graveyard of British industry.

I want to make two suggestions. The first I have made before, but it has now been proved right, and there is evidence also that it is a matter of extreme urgency. It is that the time has come when there should be a Commonwealth economic conference. But instead of just meeting as the Commonwealth representatives did at the recent financial conference, where those attending do not seem to have known what action was to be taken, or what the repercussions would be on other countries, an agenda should be drawn up so that this conference can adopt a real economic policy that can be applied throughout the Commonwealth.

The second suggestion is that the Government—and I think our Government should have done it—should take the initiative in the United Nations so that all nations can look upon this problem as one world. There is to be a conference in Moscow in a few weeks, and I understand that three or four hon. Members from each side are going to it. We should send from this House a message that we hope the world intends to use the United Nations as thousands of men who lost their lives in the war intended that it should be used. We have suffered not only from military aggression but from economic aggression. The world ought to approach this economic problem so that the foundations can be laid for saving the world economically, and we might then also avoid something else that we all dread happening.

Britain has reached such a stage of development in which we cannot survive unless we remain a great trading nation. What we are considering today are only the symptoms of a much bigger problem than the House has yet faced. Our two greatest assets are coal and the skill of our people. In the past, both have been neglected, and treated in such a way that it is remarkable that the people have responded to the nation's need in the way they have. The responsibility is on every one of us. Just as our forefathers played their part in the development of economic ideas and democratic government, so we are called upon to be pioneers so that the world shall approach its economic problems in the same way. Those two assets of our country should be given complete priority. It is only in that way that the country can save itself and at the same time make its contribution to world co-operation.

World trade is not divisible, except within very narrow limits. Less buying in one part can cause less trade in another part. What we are faced with now is the result of speculation, cornering, and—to use the modern word which too many politicians like to use—stockpiling.

We can have a slump in this country today and it may not be apparent in some other part of the world until next year, or even later. I have before me a copy of the "New York Herald-Tribune" showing that it prophesied weeks ago exactly what we should be faced with as a result of the policy that is being carried out.

Australia has been caught up in the same world economic affairs as ourselves. We should be on guard against speaking too critically about Australia and New Zealand, who have been our best friends in two world wars and have been more British than many of the British in matters of that kind. We have some responsibility for the situation in Australia. Official figures are given in the Melbourne. They state:
"Australian food exports to Britain and other Commonwealth countries fell sharply in the seven months to January this year. The value of food shipped to Britain fell from £171,000,000 to £111,000,000."
That was the beginning of Australia's immediate difficulties. Therefore, we are all caught in a vicious circle. It is now urgent that there should be a Commonwealth economic conference to consider these problems.

I read in today's "Manchester Guardian" a good analysis of the world textile position. It also made some comments. I agree with the article, except when it states:
"The world's textile industries have been over-producing."
Is there one hon. Member of this House who accepts that? What the world is suffering from is under-consumption, and not from over-production by certain industries. Therefore, what the world is suffering from is lack of planning, lack of organisation, and a failure to bring the productive industries into relationship to the world's consumption needs. I hoped that it would be upon this basis that the Government would approach these problems in the conference for which I am asking. If this Government are not prepared to take the initiative in this way, it is only a matter of a relatively short time before a government of other political forces will come into being so that the country can be saved, as it has been in the past, from difficulties of this kind.

One country after another is making its contribution to world economic suicide. Just as our country took the initiative through Arthur Henderson, Sir Austen Chamberlain, and two or three others at various times, we are now called upon to take the initiative inside the Commonwealth and inside the United Nations. Our concern tonight is mainly with our own country and the Commonwealth. Due to seven years' regulation by the Labour Government of our economic forces, we in this country have managed relatively better than have most industrial countries. But had we planned our economy in accordance with Labour's real policy, we should be in a much stronger position now to deal with problems of this kind.

During the past seven years we have, in many instances, sold abroad too cheaply and bought our raw materials too dearly. We have suffered from the Conservatism that has found expression in many quarters on economic and financial questions. The national interest should always be put first, as it was in the main during the war; but that is not Britain's policy at present. There are too many well-organised vested interests in this country, represented in trade associations and the like. It is there that the real restrictions are to be found, and not among the ordinary people.

For six or seven years the pottery and textile industries have made a great contribution to enabling Britain to live—and every one of us who is not employed in industry is now living upon industry, because income from other sources went in two world wars.

That is true. We have to approach this problem from the point of view of 1952 and not of pre-war times. I think of the people to whom I belong, among whom I have lived and still live, and I ask whether they are again to be repaid for their work by frustration, disappointment, short-time, and unemployment. My memories are bitter.

I remember as a mere boy in the First World War, and then again in the Second World War, the promise that if we only played our part we should never be asked to live in that kind of world again. Yet we ordinary people of Staffordshire and Lancashire can again see the clouds coming and growing blacker week by week because of the failure of mankind to deal with this problem fundamentally Employment can be found for both the textile and the pottery industries. We must not allow the labour force to be dispersed, for it is far too valuable. It is our economic wealth and strength. Most of the labour is skilled and should be retained within the industry and not sent to certain quarters of which talk has been heard behind the scenes.

I hope that the Parliamentary Secretary will reply to some questions. Has the pottery industry made a valuable contribution to the export drive? Do exports still count in our country? I can imagine some smart Member saying that I ought to know, but for years it has been said that re-armament must not affect our export trade. Does that still apply? Will the President of the Board of Trade undertake to see that the labour force of the pottery and textile industries is kept together so that we continue to benefit from the worth of those who have made such a great contribution to our economic recovery during the past seven years? Surely we are not going to repay them by having them influenced in certain ways?

Today I put two Questions to the right hon. Gentleman. In one of the answers he said that the Government are now discussing the problems with the British Pottery Manufacturers' Federation. But why are the trade unions not brought in? They have been brought in in the past when developments have been taking place. Why have they not been brought in now? Last week I asked if the services of the Export Credits Department could be placed at their disposal, and I am pleased that within such a short time the right hon. Gentleman has given a definite answer on that. If this Commonwealth conference takes place, and if we can have a world economic conference, we may expand the needs of these industries.

The workers should not be dispersed, and in this connection I want to quote what Mr. Lewis Wright said last Saturday in Manchester, as President of the Lancashire Weavers' Association, when he said what thousands of people are thinking. He asked whether recent Government policy, which had hit the industry at every point at which it was vulnerable, was not deliberately designed to release labour for munitions, and whether the Australian Government's im- port cuts—in spite of British Government denials—had not been agreed at the rceent Commonwealth economic conference as a result of co-operation between the two Governments. I do not go so far, but I do say that the victims of inability to deal with economic problems are the men and women now signing on at employment exchanges, or who are on short-time. These people have a right to know whether anything was said at this conference and whether it has affected our people in this way.

I hope the President will consider the record of this debate and that whatever he does he will adopt a policy so that the skilled workers—and they are all skilled workers, it is only a matter of degree—shall not be dispersed and shall not be treated in the way they have been too often in the history of our country. I hope they will see that at least the House of Commons is determined that we shall re-organise economic affairs so that they can make their contribution to Britain's economic needs.

11.13 p.m.

I propose to detain the House for only a very few minutes this evening. I was born in Lancashire and have lived there for more than 50 years. I am bound to say that this debate has given me encouragement.

I share with the hon. Lady the Member for Blackburn, East (Mrs. Castle) the honour of representing the greatest weaving town in the world, and I can understand very well the anxiety which is felt not only there but in other parts of Lancashire, and specially East Lancashire. Those who lived through those years of depression, whether they were fortunate enough to have been protected from the worst effects of them or not, can never forget them. It would not have surprised me if there had been some bitter speeches from the other side of the House. I am glad there have not been. I thought that the tone of the debate was well set by the hon. Member for Rossendale (Mr. Anthony Greenwood) who was so well followed by the President of the Board of Trade, and I hope that we shall continue the debate in the same spirit.

The hon. Member for Rossendale, who has a considerable amount of cotton industry in his constituency, told us that there was a world recession in the textile trade and quoted figures to prove it from the various markets of the world. In today's "Manchester Guardian" there is a great deal of statistical information which bears that out. I want to deal with that in order to deal with the question raised by the hon. Member for Blackburn, East and also referred to by the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), to whom we have listened, as we always do, with such attention.

I think the fact that there has been a world-wide recession in trade really disposes of the question put by the hon. Lady as to whether Her Majesty's Government are deliberately causing unemployment in the textile trade. I can assure the hon. Lady that that is not the case, and I suggest to her that it is rather a dangerous suggestion to make. I fully appreciate the arguments that she put forward, that we need to find an increasing amount of labour for the armaments programme, and so on. But it is not from the textile trade, so far as I understand it, that it is intended to find that labour. The textile trade is designed to supply our home market and to do considerable export trade. I do not think—although this the Government will be able to tell us—that there has been any suggestion whatever of running down the textile trade with a view to finding labour for the armaments drive. That is my honest opinion, and later perhaps we shall hear from the Government that that opinion is confirmed by the Ministers.

I do not want to make any further criticisms of the speech of the hon. Lady, because I know she feels as deeply as I do the vital importance to Lancashire of this unemployment question. But some remedies have been mentioned, and I wish to recapitulate them. I think the President of the Board of Trade should consult with the Chancellor of the Exchequer and the Cabinet to see whether they can suspend the Purchase Tax on textiles. If they cannot do that, will they consider modifying the incidence of Purchase Tax under the D scheme so far as it affects textiles?

I could give instances, particularly in the case of furnishing fabrics, which are important to Blackburn, of how ill this has been designed in some details, due partly to the fact that there has been no time to consult with industry; everything in the Budget is always so secret that it is not possible to make the necessary consultations in advance. But, in the case of furnishing fabrics, out of 35 specifications there are, I believe, only two which still go free of Purchase Tax. That cannot have been intended and must be corrected when we come to deal with the Finance Bill.

The question of pressing forward with some Service Department contracts will, I know, be considered by the Government. Then we have always to bear in mind the need for cutting down our costs in Lancashire by increasing efficiency, and I hope we shall have increasing co-operation in this between the employers and the unions, because that is so important.

New industries have been mentioned. Of course we want new industries in Lancashire, and diversification, although some do not share that view. It is my view. I would remind some hon. Members, although I do not need to remind Lancashire Members, and I would say this so that all the employers in England may hear it, that in Lancashire we have the best skilled workers in the world. I was talking recently to one of the greatest manufacturers in the world, who was asked by the Government during the last war to put up a factory. He said to the Department concerned, "Yes, if you will let me go to Lancashire, because that is where I can do the job properly, and that is where the best skilled workers in the country are to be found." If other employers do not know that, they had better learn it.

Another suggestion I wish to make is that we should re-open the Liverpool Cotton Exchange as quickly as possible. My next suggestion is that the Government should go ahead with making arrangements with Japan as fast as possible. My last suggestion is that we should continue to work together in this House irrespective of party. I had the pleasure the other day of going on a deputation to the President of the Board of Trade with other hon. Members of all parties from East Lancashire. I beg hon. Members on the other side of the House and on this side to continue to co-operate in the interest of Lancashire.

11.20 p.m.

We have had a very calm and sensible and well-informed debate so far upon this subject, but I must confess that I have a sense of disappointment, though not so much with hon. Members on both sides of the House, many of whom have spent the best part of their lives in the textile industries and who naturally wish to emphasise the particular and more detailed problems of the industry with which they are acquainted. But, quite frankly, I should like to say to the President of the Board of Trade that he has missed a historic opportunity.

If I may say so, the right hon. Gentleman is a Welsh Member of sorts, and perhaps he will not take it amiss from a colleague if I give him a friendly warning that, after all, in one's youth, good looks and a fluent address may take one a long way but, as a Cabinet Minister, we expect a more substantial analysis of the problem than we have had from him today. I say that for the reason that today in this House he had the opportunity of telling not only the House but the country, and I might even suggest the world, what is to be the Conservative Party's method of obtaining a high and stable level of employment in this country.

It is natural enough that many of us should deal with the details of the textile industry with which we happen to be most concerned at the moment. But surely this is the first occasion facing any Government in this country since 1945 on which they have had a major problem of full employment. Both parties are committed—we on this side to a measure of full employment and the party opposite merely to a measure of high and stable employment. This was the occasion to inform the House by what methods, by what new techniques and new instruments, the party opposite propose to deal with this problem, different from the methods which they employed with so little success between the wars. To suggest that at present we have a high and stable employment in our textile areas is obviously false.

I represent a constituency in North Wales, which is not usually considered to be a textile area. We are renowned for our slate quarries, for our beautiful scenery and for our hospitality; but in fact in my own constituency there are at this moment upwards of 5,000 rayon workers either unemployed or on short-time or facing a prolonged holiday without pay over Easter. We have also in North Wales, on a smaller scale, our woollen industry which is facing difficulties too.

I do not wish to be parochial in this matter, but before the war we were urged to modernise the Welsh textile industry. It is only small, but for its own locality it is important. The industry in my own division did precisely that. It modernised itself, became up-to-date and went into the fashion market. In other words, it went out on to the high seas and did not remain just a coastal vessel. Now it faces the full blast of world conditions.

This problem is being dealt with by the firms concerned—and I should like to pay them this tribute—with the greatest consideration, in that they have been doing their best to meet the immediate interests of their employees. The fact remains that we have some very difficult problems here to which, in my opinion, the right hon. Gentleman did not offer adequate solutions.

In the woollen industry, the primary difficulty has been the question of fluctuations in prices. The advice that I am given from the persons with whom I have consulted on this matter is that the woollen industry is not in such a desperate position as cotton or rayon—the outlook is somewhat more hopeful—but it is going through a very painful process of readjustment after the fantastic boom in world wool prices last year, and the revival of trade depends upon a firm basis for finished cloth and wool prices.

That is a major problem. It is not a national problem; it is an international problem, and I do not feel that we have had from the right hon. Gentleman evidence of sufficiently profound thought upon this matter. It is not a new problem. It has occurred before and will probably occur again, with extremely disturbing effects throughout the world. Have we any new thoughts on this matter—anything fresh to offer which is different from the policy of alternate booms and slumps pursued between the wars—or are we defeated by it?

In rayon and cotton we seem to have a very serious problem. It is not just a matter of raw material prices and how to deal with them; it is the more difficult problem of the whole level of distribution and consumption in international trade. Again, what are the proposals which the right hon. Gentleman is considering? What conclusions has he arrived at? As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) put it, what is he considering as a solution of this international problem, which is affecting not only the workers of this country but the workers of the world? Have we had from the right hon. Gentleman tonight a clarion call to the world to try to get together and solve this problem? I find that completely lacking in his speech.

Turning to the home position—because there, after all, the matter is more within our own control—have we had any evidence from the Government that they have had any fresh thoughts about the methods of dealing with this problem of under-employment and unemployment when it hits this country? I should like to remind the right hon. Gentleman that when the Labour Government took office in 1945, although we did not have this particular problem to deal with, we had the extremely difficult problems of postwar reconstruction; we did not just sit down and drift with the tide. I suggest that the same constructive spirit that animated Sir Stafford Cripps when he was President of the Board of Trade should animate the right hon. Gentleman, if that is not too much to ask.

What evidence have we had from the Chancellor of the Exchequer that he, in charge of the monetary policy of this country, has shown any better appreciation of the need for a new outlook in this matter? In other words, what is the value that we are to place upon the Tory pledge that they are able and prepared to maintain a high and stable level of employment?

That is another matter which my hon. Friend can press when he catches the Speaker's eye. Surely we are entitled to have some evidence that there is some fresh method of approach. Instead of that, what have we had? We have had evidence that the Conservative Government are still using the indiscriminate weapons of monetary policy, about which we on this side of the House have always complained; that they cannot take into account any particular social or economic difficulties.

If we take the Bank rate and the restrictions on credit, for example, there may be arguments for them in general terms. But how, then, does Her Majesty's Government meet the position mentioned by hon. Members on both sides of the House, when one has whole communities depending upon one industrial unit? The criterion of this form of monetary policy is a financial one, but there are other criteria—social and economic—and if the criterion is purely a financial one, one cannot make allowances for the condition of certain industrial units. That applies in areas where, for one reason or another, there is no opportunity of shifting labour from one occupation to another. My constituency is a case in point. No work is available in the townships of Flint and Holywell, other than in the textile industries, on which the people are dependent for a livelihood.

A large enterprise with resources may be able to carry on for a fairly considerable period, but the financial stability of smaller enterprises may not be so great, and they may need extra financial help. Nevertheless, the disastrous effect on the workpeople is just the same whatever the financial status of their employer. How do the Government propose to deal with that? If they are to use monetary means alone, how do they bring the social factors into their economic planning?

We believe that the Chancellor of the Exchequer ought to have taken a different attitude towards Purchase Tax in the present situation of the textile industries. In his Budget speech the Chancellor told the House that, realising that there are difficulties in consumer industries, he is proposing to keep the level of purchasing power this year similar to what it was last year. Again, this is an undiscriminating monetary method of dealing with a particular industrial problem. It is like a blindfolded man wielding his bludgeon and knocking down the good, bad and indifferent.

Why have we not had evidence from the Conservative Party, if they really are converts to the philosophy of full employment, that in their financial policy they propose to take the steps which will meet our industrial needs? By raising purchasing power in the way in which the Chancellor has done in the Budget, they have raised the purchasing power of the middle and upper classes, the people in a position to have stocked up last year with clothing, household textiles, furniture, and so on. If their purchasing power is increased in that way, the money need not go, and in the circumstances probably will not go, to help the industries which are in special need at present. It may go on wine, women and song, and that will not help the textile industry.

Although there is some belated conversion on the other side of the House, we have evidence that in the highest quarters of the Government there is not an adequate appreciation of the need to fashion the implements of economic policy to meet the difficulties with which we are confronted at the moment. I feel very strongly that as it is purely a revenue raising matter in the present situation, Purchase Tax should be taken off textiles completely or the D level should be very much higher.

The Government cannot do everything, though they can do a very great deal more than they have. Industry itself has to face these problems and find many of its own solutions. What concerns me so much in the present situation, if it is allowed to continue without far more enterprising methods of dealing with it, is precisely this.

In the last few years since 1945 we have managed to secure to a very large extent on both sides of industry acceptance of the idea that we should improve our industrial methods and do everything which is covered by the umbrella term "productivity." Anyone who knows anything of working-class psychology knows that the minute this feeling of uncertainty arises, at one blow much of the confidence upon which that spirit of co-operation was founded is destroyed. It is not only in the industries directly concerned—it is not only in textiles—that uncertainty arises. It is infectious. It spreads to the whole district. One person speaks to another and we suddenly find coming back all the old fears, phobias, complexes, and all the tightening of emotion and the restrictive outlook which we have done so much to disperse in these last few years.

We have here a problem of the most vital concern, not merely to the textile industry which is at present in difficulty, but to the whole industrial outlook of the country. For that reason I do suggest that it will be extremely disappointing to the country if we do not have a more vigorous and constructive approach to this problem than we have had from the President of the Board of Trade today.

11.38 p.m.

It was perhaps inevitable that this debate should range more on the western side of the Pennine range than on the eastern side, and I am therefore glad to be able now to say something of the Bradford wool textile industry. Before I do so, I should like to say that the speech of the hon. Lady the Member for Flint, East (Mrs. White), and the earlier speech of the hon. Lady the Member for Blackburn, East (Mrs. Castle) contained an unfair attack on my right hon. Friend and his colleagues in the respect that both hon. Ladies seemed to imply that the difficulties of the textile industry started from the time that my right hon. Friend took office.

I made no such suggestion. All that I was pointing to were the deficiencies in the approach of the right hon. Gentleman today.

I am sorry the hon. Lady does not feel that she implied what I have just said. I certainly took her speech as implying that the difficulties of the textile industry started at the time my right hon. Friend took office. The hon. Lady the Member for Blackburn, East, certainly did say in her speech that the difficulties had become very much worse since November of last year. [Interruption.] I say that this problem, in the words of the hon. Member for Rossendale (Mr. Anthony Greenwood), is at least five years old. It is also a fact that it has been increasing in seriousness these last few months.

While we have unemployment in Bradford of a fairly serious nature, it is not as serious as it appears to be in Lancashire. We also have part-time employment that is increasing in volume. Although the situation shows no sign of any immediate improvement, I am sure that if the right methods are adopted we can do something towards the alleviation of this very serious problem. The President of the Board of Trade posed this question this afternoon: in what markets is the textile trade going to expand? He answered that the South American markets held out more hope of success than perhaps any others. He posed, also, the question as to what had happened to the traditional markets in those countries, and asked for a frank and free discussion. He has had that here today.

But I want to say this, and it is perhaps a little critical of the right hon. Gentleman's administration and his Department, as well as critical of the administration which preceded his. It is a fact that many deputations have attended on Presidents of the Board of Trade, and have pressed upon those Ministers and their advisers the necessity for looking more closely into the development of certain markets, which I shall enumerate in a few moments. Both this Government, and the last, could have been more successful in restoring those lost markets, which would largely have prevented the present trend, and I hope to be able to show that the margin they could have restored would have offset the comparatively low percentage of unemployment which has come into the industry.

Before I make my proposals, I would remind the House of the figures of our exports of wool textiles to the Latin-American countries. With regard to the Argentine, we exported in 1937 almost 13½ million square yards of woollen cloth. In 1951, we exported only 100,000 square yards. With regard to Chile, Uruguay and Cuba, whereas in 1937 more than four million square yards of woollen cloth were exported, in 1951 under a million square yards went to those countries. The case of Brazil merits the attention of the House, for there is a remarkable fluctuation of trade in the case of that country. In 1937, 300,000 square yards of woollen cloth were sent out; in 1949, nearly two million, but in 1951, the figure had fallen to 350,000 square yards.

The point I want to make with these examples is that the late Government, and this Government, should have paid more attention to commercial than to political considerations, and should they have been tougher in their bargaining?

Is the hon. Member saying that the late Government, when it was negotiating with Argentina about how much meat, and at what price, we should take from that country, should have been bargaining not so much about the price we should pay but about how much of our textiles Argentina should take for the meat? If that is so, is that what he and his party were saying to the Minister of Food in the last Government when he was in the middle of those negotiations?

I am not saying anything of the kind. What I am saying is that when the Government release sterling for the purpose of purchasing goods from this country, they should insist on a condition that the country concerned should buy our manufactured goods in return for the sterling we make available to them. I anticipated such a question as the hon. Member has put, and I would say that I am not in favour of bulk buying in the sense which he is trying to pin on me; but that there should be conditions attached to the making available of sterling for trade.

I fully understand that the hon. Member is not in favour of bulk purchasing, but only of bulk selling. What puzzles me is how he hopes to get the one without the other. He says that if we do make a bargain for bulk purchase, it would be a very good thing to make conditions about taking in return manufactured goods from this country. I quite agree. But that is not the line his party were taking when they were in opposition and we were in the middle of these negotiations. On the contrary, they were pressing the Government not to make any conditions at all, but to take all the meat they could get at any price they had to pay.

The hon. Member is very persistent. What I said, or what I intended to convey, was that the Government should be much more strict with regard to the conditions under which they release sterling for purchases by overseas countries, and that if they were much more strict they would be able to insist on conditions which would result in the sale of our manufactured goods to those countries. The Government of the day ought to insist on manufactured goods being taken as part of the bargain.

The hon. Member talks about releasing sterling. What other sterling was there to release except what was released for the purchase of the meat? If that is the case, what is the sense of his reply to my hon. Friend?

I was not at the Treasury. I cannot tell him the answer in terms of how much more sterling was available, but there were other things we wanted, and other things besides wool cloth that Argentina wanted from us.

It is beside the point to try to compare the 1937 figures with the recent figures. Argentina, in common with a lot of other South American countries, lived through the 'thirties, a period when they could not sell their primary products to Europe or anywhere else. In sheer self-defence they built up textile industries of their own, and there is all the difference between Buenos Aires now and the pre-war Buenos Aires. The second thing is that they have built up a lot of weaving and manufacturing establishments which want yarns. During my negotiations with the Argentine, because of the sellers' market and the demand for our yarns everywhere, I was not able to offer them the yarns they wanted in return.

The hon. Gentleman ought to know something of the subject about which he has been talking, because he was one of the negotiators, and he did not get meat from the Argentine. All I can say is that if he had wanted yarns and had come to Bradford for them, he would probably have got his orders fulfilled. I really do not follow the point of the interruption. I will admit that there is a limit to what any Government can do in these matters; but I do say that while it is necessary for a Government to negotiate, the Government ought to be tough, and ought to put our national interests first.

Nobody wants unemployment, and I think it is wrong of hon. Members to assert in the House, as did the hon. Member for Blackburn, East, that right hon. and hon. Gentlemen on this side are deliberately creating unemployment. Unemployment is not only bad for the worker, but for the employer and for the country. Therefore, I hope we shall have no more of that. We have to strain every nerve to increase our markets, and I hope that my right hon. Friend will pay due attention to the suggestions which I have made.

Reference has been made by several hon. Members to the increasing trade barriers being put up by different countries. There is an alarming increase in the number of markets where imports of our goods are coming under the most rigorous quota control. From some markets our goods are being excluded entirely. The time has come to inquire whether we are getting value for the money we are spending overseas or are giving away more than we receive. A much stronger line is required if we are to maintain our position.

Reference was made earlier to Greece. I do not intend to deal with that matter in detail, but it does seem odd that we buy currants from Greece but, when she wants wool yarns, she goes to France for them. I should have thought there was some method of controlling the sterling which Greece was using and to prevent that kind of thing.

I should like briefly to mention Australia and the import restrictions which she has imposed. In Bradford the opinion is that Australia, of all countries, ought perhaps to have given this country, and particularly Bradford, some priority, for Bradford paid the high prices for the wool she produced last year. I agree with hon. Members opposite that these high prices have contributed to many of our difficulties. I understand that negotiations are proceeding, and I hope that something substantial will be done to meet the position so far as Australia and ourselves are concerned.

I further understand that Australia is prepared to allow 20 per cent. of the old orders to be fulfilled over the next 12 months. If she would bring that 20 per cent. into the second quarter of this year it would very greatly help the Bradford trade. Then, perhaps by the end of September, we could come to some arrangement with her about the future.

The overriding question for the Government, if they expect the wool textile industry to maintain and increase exports, is to decide whether the multilateral trade policy that they are pursuing is paying off, or whether they should consider strengthening the United Kingdom's bargaining power in its dealings with foreign countries. Now is the time to consider that, when sterling is strengthening daily throught the Chancellor of the Exchequer's policy.

With an expanding population at home, we can continue to keep our people in full and regular employment and with a reasonable living standard only if we extend our markets. Selling more and more of our manufactured goods abroad, in the end, is the real cure for unemployment. The export trade bolsters the home trade, and our whole system may be strengthened if we fight for these overseas markets and secure them.

11.57 p.m.

I shall confine my remarks to the cotton trade, and I do not know whether some of them will be very acceptable to either side of the House. At least, they are a sincere expression of my views, and the situation is so serious that this is a time for us to come out into the open and be frank. There is rather a nice phrase credited to the right hon. Gentleman the Prime Minister in one of his lighter moods—"that I never know quite what I think until I have heard what I said."

For my part, I do know what I believe and I hope to succeed in saying it. It is essential to keep this debate in the framework of the realisation that there is a world textile recession. Everybody has done that, and I do not wish to retrace that ground.

Yes. There was a piled up demand after the war and textile industries quickly got going. Raw material prices went up in the beginning and then, after a few years, started to fall. When the Korean war started, the big demand sent prices up again. They have since started to come down for one or two reasons. First, people bought a lot because they realised prices were going up, but when prices went higher they stopped buying and now they will not buy until prices come down further.

If the hon. Member for Nelson and Colne (Mr. S. Silverman), is interested, I would remind him of one or two raw material prices. There are only two major raw material prices that now are less than they were before Korea. Wool "66's" before Korea were 145d. a pound and are now down to 119d. Hides at 22d. a pound before Korea are now down to 17d. United Kingdom American cotton on the eve of Korea was 33⅛d. per pound and is only down so far to 41d.

Is the hon. Gentleman using the word "Korea" as a synonym for world re-armament, because Korea obviously had nothing to do with it? It was the sudden world-wide demand for raw materials that sent prices up. Korea did not cause that.

I do not intend to follow the hon. Gentleman on that track. He is welcome to his view if he thinks that is the case. I am talking of the prices of these raw materials just before Korea and now. The price of American cotton in the United Kingdom now is 41d. but the price of that cotton in New York, spot, today is 35¼d., so that our prices are still higher than America's.

I feel perfectly hopeful about the future of the cotton textile industry. I make no comments about the other parts of the industry, because I have little knowledge of them. The essential thing to realise is that, although there are many demands on both sides of the House for a clear statement from the Government on what is to happen in the future, I defy anybody to produce any foundation on which they can base, at the moment, a reliable estimate. Anyone who pretends he can is indulging in wishful thinking. What is essential is that if and when in the near future the world recession in the textile trade stops, it is vital that Lancashire then shall be competitive.

I should like to put Lancashire's position in its proper perspective to world trade. Before 1914 the proportion of Lancashire trade to world trade in cotton was approaching 90 per cent. It was last year only 15 per cent. That is some measure of its reduction. The total production of the cotton textile trade in the United Kingdom is only now 6 per cent. of the whole world production of cotton goods, yarn and woven cloth. It is just as well to bear that fact in mind when we are talking about our particular problem.

We are now in fact a very small part of the total world cotton textile trade. Our actual exports at the moment, as has been said, are put at about 25 per cent. I think it is actually 30 per cent. in round figures. Regarding the employment position in these areas, I can best speak for my own. In Bolton this week it is estimated that there are about 11,000 people in part-time employment or part-time unemployment, however one likes to put it. It means, so far as many Bolton firms are concerned—although I gather it is rather different in Burnley and other weaving towns—working four or three days a week.

What actually is the condition of the market at the moment? It is very varied and very complicated. Some mills are still busy and others are in serious difficulties. I spoke to the chairman of one big spinning and weaving company this week. He is making some adjustments now and confidently expects that after Easter he will again be running at full-time.

What can the Government do? They can do several things, but what can they do to alleviate the present situation? I think they can do very little, and I say that advisedly. The Government could consider the D scheme and decide whether adjustments could be made to lift the level. The Government might even decide, if the Chancellor of the Exchequer thinks he can spare the money, to scrap the D scheme so far as textiles are concerned. That would be welcomed by everyone. But the final decision there, it appears to me, is whether the Chancellor can spare the money.

As regards the placing of Government contracts, that matter has already been raised, and it is only a little drop in the Lancashire bucket in any case. But if those contracts could be placed early it would help in a small way. So far as the Australian trouble is concerned, we should remember that the buying spree was coming to an end in any case. Most manufacturers in Lancashire will say that they did not expect in the months ahead to place anything like the orders with Australia that they did during the past year.

I think the Government should make clear their attitude towards the immediate future of the cotton trade and its size. That is quite reasonable and would help to clear the air, but I would put it this way. They should make it clear whether they wish Lancashire to go on and earn its own living in the world, and if Lancashire is given the chance it can do so. But if the Government decide they would sooner have these people in engineering now, and that there is plenty of scope in engineering, they should also indicate that. I hope they will not indicate that, and I do not think there is any need for it.

I think Lancashire can earn its own living if—and on that "if" I wish to put several points. The Government should make it plain that there is no intention to protect Lancashire industry from fair world competition. I have been a little alarmed today at the way in which hon. Members have been talking about trying to break down the barriers of trade and in the next breath saying that we must keep Japanese stuff out and keep somebody else from going into the Colonies but that everybody must let our goods go through. It is extraordinary to me how people have asked for discussions with the Empire and other countries to force down these barriers and then have suddenly stopped. Nobody ever seems to mention the words "free trade."[An HON. MEMBER: "No."] All right, we will see.

Surely it is essential that while the Government continue with their efforts to make the £ convertible they should provide sufficient dollars to buy an adequate amount of dollar cotton. That provision would have an immediate effect in bringing down prices of many other qualities of cotton that can be used in place of American cotton. It is essential also that the Government should alter the arrangements for buying raw cotton, to provide the consumer with an opportunity to obtain regular supplies of quality cotton at world prices and to influence prices by his purchase or refusal to purchase. Those conditions do not exist at the moment, and that is one of the reasons for the high price of raw cotton.

It is very necessary to stress that the future of Lancashire largely rests upon quality. We cannot pretend that we can compete with the cheaper goods coming from Japan. That quality must be not at the high levels only but at all levels, and to produce that quality Lancashire must be enabled to buy regular supplies of the type of cotton it requires.

Probably most important of all in this problem is the over-all policy of the Government. It is of vital importance that the Government should get on with the job of making the £ convertible and of forcing down the barriers of trade throughout the world. If they do not do that, the House must realise that trade must come to a standstill and that there is no future for us other than complete stagnation in every country.

I should like to conclude on this note—that in the 1930's Lancashire trade was on its knees or, colloquially, on its uppers, and my impression is that now it is very much on its toes. I should like to draw the attention of hon. Members to what I consider a very reasoned and admirable speech which was made yesterday by the President of the Master Cotton Spinners' Association in Manchester. The most interesting feature of the speech was its spirit. The President said that there were two solutions to these problems.
"First, there is the restrictive and defensive attitude which thinks only in terms of cutting down and contracting. … Secondly, there is the strong and fighting attitude of an industry which is prepared to go out and win, as it has won before. It makes me angry when people who should know better talk as if we had no competition to face before the First World War. We faced and beat competition from America, from France, from Germany and from a dozen other countries. We can do it again."

12.15 a.m.

This debate today carries me back to the time when I first entered the House, when I had the honour to be the Member for Blackburn. I can remember many debates, much the same as this, which then took place on the textile situation, in one of which one of the former Members for Nelson and Colne said: "Lancashire is listening to this debate with tears in its eyes," The hon. Member for Bolton, West (Mr. Holt), at any rate, has reassured us that there are no tears in Lancashire's eyes today; there is a real fighting spirit.

The hon. Gentleman did mention free trade. I believe a great many people in this House are in favour of free trade; but not free trade for this country only. If it were to be free trade more or less all over the world, that would be a different matter; but the textile industry in a great many countries has been built up into competition with us behind protection.

Do not think that people in India have no capital. There are far more millionaires in India today than in this country.

I can remember that during the slump in 1931, outside a mill in Blackburn, an overall was shown to me by the manager, and he said: "If we got the cotton for nothing we could not manufacture at a price to compete with Japan."

I was in India in 1947, and I saw that the people then were terribly short of cloth. It is a custom there—just as we give presents at Christmas time—for Indians to give their wives and children presents of cloth in the spring, at the Fagooa Festival and in the autumn at the Durga Festival. There were several strikes in India because this cloth could not be obtained at any price, even if aeroplanes were sent right to the manufacturing districts. It is a different matter today. I get no complaints from India, and I understand there is plenty of cloth available now.

The hon. Member for Burnley (Mr. Burke) raised the question of Japanese trade marks. I can remember very well that one of the larger cotton firms—I think it was Tootal, Broadhurst & Lee—complained bitterly several times that the Japanese were taking their trade marks and imitating their goods within a few months after they had been shown at the British Industries Fair and elsewhere. There was a match factory in Japan which was named "England" by the then Japanese Government, and every box of matches sent out from that factory was labelled "Made in England."

The hon. Member for Bolton, West, referred to competition before 1913. I can remember going out first to India in 1904, in a steamer with Lancashire cotton men, and they were "on the pig's back" and practically owned the ship because they had command of the industry all over the Far East.

Afterwards, India competed with Lancashire, and later on Japan beat India in competition. I believe that one of the reasons for the Japanese-Chinese war in the 30's was that if Shanghai, Hong Kong and other parts of China had been left alone, they would have beaten Japan in this trade.

Competition exists all over the world. It is no good pretending that an ill-wind does not blow anybody any good. Great numbers of people in the Far East cannot afford high prices for cotton, and they depend on the cheaper sorts, made by Japan and India, for the clothes which they wear every day. Japan actually supplies that need.

The matter which principally concerns me is Ulster linen. Only a few months ago a lady in Ulster was sending a sheet to the laundry and she remarked to the girl who was helping her, "Look at that sheet—made in 1886."The girl gave the good answer, "It is time enough now to replace it." Linen has the disadvantages that it is the most expensive fabric and that it is the most durable. It lasts far too long when sheets made in 1886 are still standing up to our laundries.

The Huguenots who came to Ulster after the massacre of St. Bartholomew nearly 400 years ago would be very surprised to find that the greatest single export to the new world is linen. It is even greater than the export of Scotch whisky. In the last year the linen industry in Northern Ireland got five million dollars from the U.S.A., and in our best year we have got, in round figures, £500,000 sterling from the Argentine and £1 million from Australia.

Everybody desires to speak of Australia with great respect. Many hon. Members must have served with the Australians in one world war or the other, and we know their feeling for the Mother Country. We know that we should not have had this trouble about contracts if Australia had not been in very dire financial straits, and we hope she will very soon recover.

Some six months ago we had only 6 per cent. of unemployment in the Ulster textile industry; today we have 12 per cent. I had a telegram from the Belfast Chamber of Commerce this morning saying:
"Unemployment in textiles increasing. Outlook not good. Approximately 20 per cent. looms stopped. Only about 40 per cent. on full-time. Some anomalies in D scheme should be dealt with quickly."

I am not the first hon. Member today to have mentioned the D scheme.

Several linen manufacturers came to see me the weekend before last to complain about the D scheme. It seems that manufacturers who were making a decent living and keeping their employees occupied were very badly hit when some goods which were not bearing Purchase Tax were taken out of the Utility scheme. I bring this to the notice of the President of the Board of Trade so that he can see that not only Lancashire has been hit as a result of that.

Buying has stopped all over the world and the textile pipe-line is full. That is what has brought about the present depression. My four suggestions are these. The first concerns the Lancashire Cotton Exchange. It would be a good thing if it were re-opened. [HON. MEMBERS: "Why?"] Because I believe that manufacturers could then go, as in the old days, and buy exactly the quality of cotton they want for the goods they are going to produce. It also provides a hedge for them. If they are selling forward they know where they are.—[Interruption.]—I think we will leave it at that.

My second suggestion concerns the convertibility of sterling. I agree with the hon. Member for Bolton, West that this should be our aim. Convertibility would help the trade and efforts of the people of our island. My third recommendation is for Imperial Preference. That is the one thing we should go for all the time. The South American market has dried up very badly. I do not know the reason trade with Argentina has suffered. We are ready to buy Argentine products. We used to have a very good market there. There is no doubt the United States have helped the linen trade, and they have not been so harsh in their tariffs after this war as they were before.

The right hon. Member for Bishop Auckland (Mr. Dalton)—and he is an important person—advised the country and the world not to buy. I am not suggesting that the whole of the slump is due to the right hon. Gentleman, but at any rate, sitting on these benches, if one looks at the coats of my hon. Friends they are like mirrors. You get a shock when you see your face, and I suggest that it is time that all of us, and our wives also, bought some new clothes.

The question arises whether this is a slump, a depression, or a temporary recession. That question can possibly be answered by asking whether we should put our own children into the textile industry today. I am doubtful if it would be wise, unless they emigrate to Canada or Australia, where eventually a lot of people in this island are going to go, 50 million people are going to find it very difficult to earn a good living in these islands.

Not enough encouragement is being given today to the installation of new machinery in industry. Some of the provisions of Finance Bills of recent years have not been encouraging. Take a firm like the Lancashire Cotton Corporation, which was built up between the years 1930 and 1939. New buildings were erected and new plant installed, and this was all possible under liberal taxation principles introduced by a Coalition Government.

I do not want to tell a fairy story by suggesting that all our troubles would be solved by exchanging our surplus textile goods for Russian grain and timber and, much as I admire the President of the Board of Trade, I do not look upon him as a magician or even a hypnotist. I do not believe any Government can run any industry. I do not think they are capable. I am a firm believer in private enterprise and hard work. But still I think the President of the Board of Trade can do something to help and not to hinder, and I hope that this debate will enable a clever man like him to separate the wheat from the chaff, to profit by the good advice given to him, and to do something for the great textile industry of this country.

12.29 a.m.

The hon. and gallant Member for Down, North (Sir W. Smiles) will forgive me if I do not follow him on the question of the linen industry of Northern Ireland, except to say that if he is still using sheets dating back to 1886 I do not think he is making his proper contribution to the linen industry of Northern Ireland.

I am very pleased that we are having this debate and hope that something concrete will emerge from it. My hon. Friend the Member for Rossendale (Mr. Anthony Greenwood), in an excellent speech, set the tone for this debate; and that was followed by the President of the Board of Trade who, I think, slipped once when he became somewhat partisan, trying to make political capital out of certain contracts placed abroad in the past year. I think that he might have told the House that when those contracts were placed abroad, firms in this country had been asked to tender, and that the contracts were placed abroad with the approval of the industry. [An HON. MEMBER: "He said that."] Well, if he said that, I missed it; but I thought he was trying to indicate that something was done when my party was in power which would not have been done if his own had been in office.

I think that it ought to be made clear that he said that the reason the orders were placed abroad was that the manufacturers were full up.

If the President said that, I did not hear him say it; but I am not going to adopt this morning the attitude adopted by the Opposition of a previous administration, when everything that went wrong was blamed on the then Government. I am not going to blame the present Government because there has been a recession in world trade. The present Government will not be judged on that fact—which they could not control—but upon the way they deal with the crisis of the present time. Governments come and Governments go, and this will be one of the Governments which goes; but it is the Government, and it is to them we look for action. We do not expect them to solve all the problems of the textile industry which, if helped, can solve its own.

As Sir Raymond Street, when addressing the Cotton Board's conference at Harrogate in October, 1951, said:
"I do not believe that our ultimate destiny depends on what the Government does for us, but more upon what we do for ourselves; but, all the same, it is important that Government policy should be such as to create conditions in which our energies, our resources and our enterprise can yield a harvest of success."
I should like to come to the speech of the President and express disappointment that he did not put forward more concrete ideas. He said that he would deal with the action taken by the Government. I listened carefully, but the only two items of action I discovered were the appointment of the Hopkins Committee and that the right hon. Gentleman had visited industries in the North of England.

It is right and proper that the President should make himself acquainted with conditions in the industry and get in touch with industrialists and trade unions, but we expect a little more to emerge from these discussions. We want some action to be taken. If we ask the Minister of Labour about the position in the textile industry he will tell us that he is in close touch with the President of the Board of Trade; if we ask the President he will say that he is in close touch with the Minister of Labour. We want something more to emerge than that. Throughout his speech I can find no other evidence of the action the Government have taken.

He then went on to deal with the problems that faced him. The first was that of raw materials, and that, he said, was why he appointed the Hopkins Committee. I am not going into the question of the purchase of raw cotton, as I prefer to leave that till the Committee has reported. But I would remind the House that when there was a quick rise in the price of raw wool and stockpiling took place, a suggestion was made from America that the solution was bulk buying and guaranteed prices for a number of years.

The right hon. Gentleman's second problem was prices, price control and utility. Because of the growing complexity of the utility scheme and certain complaints from other countries, the late Government appointed the Douglas Committee. Unfortunately this Government have been in too much of a hurry to accept the Douglas Report and in fixing D levels without the full consultation and consideration that should have been given to the matter.

I have been very pleased tonight to hear so much agreement from both sides of the House that the D line must be altered, or that as a temporary measure Purchase Tax should be removed. In the Budget debate last week I asked the Chancellor of the Exchequer if he would consider removal of the tax as a temporary measure, but I got no answer. Now that the point has been pressed by hon. Members on both sides, I hope that a little more attention will be given to it.

The third problem that the President said faced him was the world-wide decline, and I should like to take that in conjunction with the next two—the buyers' market and competitive efficiency. I do not want to under-estimate the importance of the world market to us, because if we lose the world market now we lose it for all time; but I would remind him that 75 per cent. of our trade is home trade, and therefore we must see that we have conditions in this country which will help us to maintain a high level of production for home consumption. The restriction in purchasing power of a large section of the community is not going to help the textile industry.

The Chancellor of the Exchequer tells us that it is an incentive Budget and that he has removed Income Tax from certain sections of the community. But what about the millions at the bottom who were not paying Income Tax before and who now have added burdens? They are going to find it still more difficult to purchase in the near future.

The next problem was the increase of unemployment. The President of the Board of Trade quoted for the textile industry an unemployment figure of 5 per cent. and a figure of 2 per cent. for the rest of industry. That figure was given in the "Financial Times" yesterday. I would not advise the President of the Board of Trade to suggest to the textile workers of Lancashire and north-east Cheshire that they do not need to worry much as there is only 5 per cent. of unemployment among them. They will tell him whether it is 5 per cent. or not. The hon. Member for Rossendale used the figure of 70,000, and I think it is generally accepted that throughout the textile industry unemployment is running at about that figure.

The problem does not end there. With the growing unemployment, we get a new spiral. In the past, there was a good deal of talk about the spirals of wages and prices chasing one another. Unemployment brings restriction of purchasing power. This creates more unemployment, and so the spiral goes on. When unemployment stands at 70,000, it is not only their purchasing power which is restricted. They all have dependants, and one can count at least two dependants per unemployed person. The purchasing power of about 200,000 is affected. Those are the problems facing the President of the Board of Trade and to which we have to apply our minds.

Let us hope that after this debate we shall have some idea of what help can be given to this industry; not that we expect the Government to solve all the problems for the industry, but we do expect them to take certain steps which will be helpful to the industry.

I want to refer first to Australia and other Commonwealth Governments. Like other Members, I do not want to say anything which might be critical of Australia without knowing the full facts. Last week I asked the Chancellor of the Exchequer to give us more detailed information about what took place at the Commonwealth Finance Conference in January. We have had no information about that conference that allows us to judge whether the decisions then taken were sufficient to solve the problems of the sterling area. The Chancellor of the Exchequer had this to say about the conference on 29th January:
"Expansion and development of the great resources which each of us commands are the only real and lasting remedies, and I must say that our imaginations were fired by the extent of these resources in the overseas dependencies and in the Commonwealth as a whole."
A little later on he says:
"But there will be no future unless the sterling area can overcome the immediate and pressing difficulties which face it. The whole foundations of our trade, and, therefore, our existence—the central reserves—must be preserved and must be built up again. In other words, the sterling area as a whole, and not only this country, must face up to the basic need of paying its own way. To all of us in the conference it was clear that, unless the sterling area paid its way, the stability of our currency would be undermined, with great loss to ourselves and to our friends outside, and therefore, we were all agreed that we should not spare ourselves at all in taking whatever action was necessary to put the whole area firmly back on the road to complete recovery."—[OFFICIAL REPORT, 29th January, 1952; Vol. 495, c. 46–47.]
The surprising thing is that only two months after that speech this action was taken by Australia.

The important thing is that the sterling area must work together. The policy must be co-ordinated, or the sterling area might disintegrate, with disastrous effects to every member of it. That underlines the importance of calling a Commonwealth conference. On Monday the Prime Minister told us that there was no evidence that Australia's action had caused unemployment in the textile industry—that was the excuse for not calling a conference. But nobody has suggested that. Nevertheless, that action is one of the additional factors that the industry has to worry about. The Commonwealth must work together and consider the sterling area's problems as a whole.

Secondly, the Government should take more positive action in international co-operation, not only to stabilise prices but to widen world markets. Action by one country can disastrously affect the economy of others. For example, American stockpiling had disastrous effects upon the economy of this and other countries in Western Europe. In the conditions under which we live, there must be more international co-operation, and I ask the Government to take the lead.

Thirdly, there is the question of Japanese and foreign competition. The Japanese must live, and they are faced with an exporting and importing problem like ours. But we have had plenty of examples of unfair competition, and the Government must be alert to act when that emerges again. We have seen in this House copies of goods produced in this country, and possibly other speakers will refer to them tonight. We are not saying Japan must be prevented from trading, as one of the Bolton Members seemed to suggest. I should like to see a liberalisation of a good deal of world trade, but when we are fighting for our lives we must consider ourselves first. It is going to be necessary for the Government to impose quotas so that the textile industry of this country can recover.

Fourthly, I touch on the placing of defence contracts. The President of the Board of Trade said that not very much could be done, but whatever is done would help the industry now. Some contracts have been placed and others are to be, and the suggestion made by the hon. Member for Rossendale was that the placing of contracts should be expedited. What can be done to help the industry, must be done.

I warn the Government to show no complacency about unemployment in this industry and think it can be swallowed up by the re-armament programme. If we lose the labour force in textiles now, we shall have lost it for all time. As has already been said, the labour force has been built up again in the past few years. One of the directors of a textile firm near my constituency was speaking to me in the House today. He said that one of the great changes recently was that they were getting back to the industry boys of 15. If we allow unemployment to continue, if there is a greater recession still, and if we look with complacency on it and allow them to go into retirement, we shall never again get back confidence in the industry.

My next point is the question of credit restriction. The Government must look at this problem again. The industry needs the help of the Government. Their policy, by raising the Bank rate, is to restrict credit. Whatever their general policy, the industry is now fighting for its life and requires all the help the Government can give it. Again, on capital investment, there should be a removal of the restriction. We must make the industry as efficient as possible and allow new machinery to go in.

My hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) referred to machinery being sold to America which should be going to our own factories to improve efficiency here. We can carry this idea of exporting capital equipment too far, so that we build up the industries of all other countries abroad to the detriment of our own.

The President of the Board of Trade referred to Arkwright. Hargreaves, and Crompton, whose inventions gave such a start to the industry, but the unfortunate position is that at the present time inventions like theirs would not be used in this country but would be exported to other countries. We should still be left with the old hand-loom weaving. We are partly responsible for having built up these industries in other countries, and the Government should look into the problem. It is said that if we do not export textile machinery other countries will, but let us see that our own industries are equipped as efficiently as possible.

I call for the greatest consultation and co-operation between every section of the industry. There must be a joint effort between Government, employers, and employees. I should like to see the greatest measure of consultation between employers and employees in every factory in addition to the general consultation which takes place. I appeal to the Government to call a conference of Government, manufacturers, and trade unions, not only for the cotton industry but also for wool, silk, and linen. It might even be worth while calling in one or two Members of Parliament. We should see if we cannot work out some solution for the difficulties which are now facing the industry.

12.55 a.m.

My only excuse for taking part in this debate is that I am a director of a number of textile companies. The hon. Member for Stalybridge and Hyde (Mr. Blackburn) said that he did not blame the Government for the world-wide slump but that this Government would be judged on how it handled the problem at home. I think both statements are perfectly fair. A previous Opposition Member said that the position was very serious, much more serious than most people in this country realised. I think that is profoundly true. Unless they are very lucky, I think that every exporting industry will find themselves in exactly the same position as the textile industry are faced with today. We are facing what I would call a crisis in the world capitalist system, and we either stand or fall on the way it is handled and the measures taken here and in America. [An HON. MEMBER: "The hon. Member will soon be on this side of the House."] I have much more sense than that. At least on this side of the House we are prepared to face facts, whether they happen to please the party extremists or not.

The hon. Member for Rossendale (Mr. Anthony Greenwood) opened this debate with a most reasonable and well-informed speech. He made only one bloomer, and it was a bad one. He was pleading that the Government should use their powers when negotiating with people like the Argentine to see that the Argentine bought more textiles from us, when we were trying, for example, to purchase meat. What he could not see was the face of his hon. Friend the Member for Brighouse and Spenborough (Mr. J. Edwards) who, when he was Economic Secretary to the Treasury, had the responsibility for those negotiations. He should have seen the face of his hon. Friend when he made that extraordinary statement.

The hon. Member for Brighouse and Spenborough knows quite well, and I hope he will tell his hon. Friends, that he could not get the Argentine people to buy our finished textile products. They were not interested. They can make their own stuff. What the Argentine required from us was coal, petroleum, tin-plate and steel, none of which we could supply in adequate quantities or at the right price. Hon. Members should get hold of the facts.

I speak as one who is interested in one of the smaller sections of the textile industry, the hosiery trade. Hon. Members opposite may be interested to hear one or two facts. It is just a year ago this week since wool touched its highest price. A year ago what we call 64's wool, the best quality, was costing around 34s. 6d. a pound. Today we are buying it under 12s. In those days, as the President of the Board of Trade doubtless knows, deliveries were so difficult and trade was so uncertain that the trade was having to contract, not for the normal three months ahead to get delivery, but for nearer 12 months ahead.

The industry has round its neck—and the Chancellor will discover this when he wants the tax next year—contracts at 30s. and over. Yet we are pricing to try and sell at home and abroad on the basis of 12s.; and no Government can alter that. Hon. Members should get hold of these facts first before they ask the President of the Board of Trade to do things which I believe neither he nor his predecessor could possibly do.

Does not the rate of interest have any bearing upon carrying this financial burden?

I will give the hon. Member that point, but it does not make all that difference between 34s. 6d. and 12s. a lb. when one has, say, 250,000 contracts to face.

No, I will not give way. The hon. Member has more than his fair share of the time of this House. He is not a Socialist in that respect, to the extent that he does not believe in fair shares. Hon. Members opposite have criticised, and many of our constituents criticise, the alteration in the Utility scheme.

That shows how little hon. Members know about it. Utility scheme schedules without specifications are utterly useless. I am not blaming the Socialist Government but asking Members of that Government the economic facts of life. After Schedule K, in the hosiery trade there were no specifications at all, except for nylon stockings. In Schedules L and M, which were issued while the party opposite were in power, there were no real safeguards at all for the general public in the utility scheme. If we are to have a Utility scheme as we understood it during the war, we must have specifications to which garments must be made. Without those specifications it is a Utility scheme in name and not in reality.

There are four points I want to make as shortly as I can, because many hon. Members wish to take part in this debate. The first is that this problem in the textile world, which from the point of view of employment shows up worst and in its harshest form in Lancashire, did not start, as some hon. Members have implied, when this Government came into power. I recommend hon. Members to examine the Economic Survey for 1951, published by right hon. Members opposite. Paragraphs 100–103 of that Survey show quite clearly that the textile industry would face the gravest and most difficult times in 1951.

No one suggests that world conditions today are easier than it was then believed they would be. Of course not. The previous Government said, on page 45, paragraph 128, of that Survey:
"The account given in this Survey of the United Kingdom's economic prospects in 1951 is in many ways harsh and unpleasant."
The Survey goes on to say:
"Even so, many of the assumptions on which it is based may well prove to have been optimistic."
That is what the previous Government said over a year ago. This problem of manufacturing textiles and being able to sell them abroad at a reasonable price was obvious to the previous Government 18 months ago. The only point I am making on this is that it would be unreasonable to put all the blame for the present crisis, acute as it is, on to the present Government. [HON. MEMBERS: "Nobody has done so."] That has been inferred, if not said.

The hon. Member is trying to shoot down his own clay pigeons.

The hon. Member has made a statement quite clearly to the effect that it has been asserted that the causes of the trouble in the textile industry lay at the door of this Government. Will he indicate which hon. Member has said that in this debate, or even suggested it?

Quite easily. I have the exact words here. The hon. Lady the Member for Blackburn, East (Mrs. Castle) said, "This Government is deliberately reducing the standard of life by the policy it is pursuing in the crisis"—

One hon. Member is a Bevanite and the other an Attleeite. I recommend hon. Members opposite who will not believe that this is not a purely British problem to read the United Nations Economic Review for 1951. It says:

"Unemployment in the textile and clothing industry was higher than a year ago in nearly all countries for which figures are available."
So it is quite clear that our problem is part of the world problem, and we are not going to cure it in isolation from the rest of the world.

Hon. Members should bear in mind that the textile supremacy which we enjoyed before the war has gone for ever. The Economic Review was that, taking 1938 as 100 per cent., the volume of textile production in Western countries works out for last year approximately as follows: Ireland and Norway, 203 per cent.; Belgium, 177 per cent.: Greece, 174 per cent.; Finland, 169 per cent.; Denmark, 166 per cent.; Hungary, 156 per cent.; Sweden, 146 per cent. and the Netherlands 146 per cent. Then we come to the United Kingdom—116 per cent.

So the traditional markets that we enjoyed have gone because, as this Survey says,
"It is extremely unlikely that these countries will be able to develop textile exports on a large scale. … This prospect carries with it the danger of a revival of textile protectionism in the smaller countries, which, in turn, will make the great European textile producers still more dependent upon exports to other overseas areas."
Hon. Members opposite have spoken many times about what we should do to protect our country from Japanese competition. There are two aspects to that. One is that we have not yet felt the full force of the Japanese competition that we shall have to face. At the moment Japan is employing only 5½ million spindles, whereas her capacity pre-war was 13 million. She lost 80 per cent. of her spindles during the war, and so practically the whole of her industry will be modernised and up-to-date. If we find it nearly impossible to live with the Japanese competition today, what are we to do when the Japs really get back into the full tide of their trading?

Hon. Members say that we should protect Lancashire against them. When we talk about the undeveloped peoples, the Opposition cry out that we should do all we can for the Asiatics. Shall we help them by denying them the right to earn their own living? If hon. Members opposite wish to protect Lancashire from Japanese competition, to that extent they prevent the Japanese from earning their own living.

We have an income per capita of 774 dollars; the Japanese an income per capita of only 100 dollars, a little more than an eighth of ours. The Japanese textile worker works for 7½d. per hour compared with the Lancashire worker's 2s. 7d. If we take steps to prevent the Japanese from selling their goods in favourable or reasonable conditions, we prevent the Japs from getting a decent standard or anything like the standard which our own people enjoy.

Of course we do not control China, but we seem to have a lot to say in the control of policies which encourage the closing of China and stopping the very kind of thing of which the hon. Gentleman is a protagonist, namely, opportunities for free competition. We ought not to agree with the American policy of closing the Chinese market to Japanese trade.

Does my hon. Friend agree that for two years we have had a British Government representative in Pekin—

—and that he has yet to be recognised? This country has done its level best to trade, but unless one's Ministers are recognised one cannot make any progress.

I shall never need any help from Nelson and Collie until the constituency gets a new Member of Parliament.

I now leave cotton and turn to wool, in which I am more closely and personally interested. When the war ended, the Joint Organisation had 10 million bales of wool which had been accumulated during the war, and it was its task to market those surplus bales, as they were regarded, in an orderly and reasonable way.

It was thought that it would take 13 years to market that accumulation, but it has gone, as far as we can tell, within five years. So it is reasonable to say that the world has purchased—not consumed; I do not believe that it has been consumed—the annual world clip of wool plus two million bales per annum of these war-time reserves. Is my right hon. Friend sure that great quantities of those J.O. reserves were not purchased and put on one side as a currency hedge by people in Western Europe? Is the right hon. Gentleman sure that part of those reserves are not now coming on to world markets and are partly responsible for the slump?

It is of the greatest importance to us in the wool industry to know, because I believe it to be fundamental in regard to wool and cotton, that people throughout the world will not start to buy again until they have some confidence that the raw materials have touched bottom and that there is going to be stability. They purchased in great quantities a year or 18 months ago because every time they opened their newspapers they read that wool was going up, and so naturally they bought and put away good stocks. They will not purchase today when they see that prices are going down and down.

There is no cure for the world textile problems unless there is stability in raw materials in world markets. Has the right hon. Gentleman any knowledge whether these war-time accumulated stocks have really been consumed? Or are they still coming out from those countries which, I believe, purchased them as a hedge against currency inflation?

Lest I give hon. Gentlemen the impression that I am a complete Jeremiah and defeatist, I would remind them that the world population is growing at the rate of 25 million a year and that the coloured peoples are demanding a higher standard of life. Therefore, if only there could be some stability given to world commodity prices, I believe we could turn from the present state of world markets to better times.

I do not care what it is as long as it produces good results. It is this psychological attitude of the purchasing public towards world prices that is going to give us the turning point in our industry. It is not Government action on isolated points. Given world stability of commodities and restored public confidence, half our troubles would be over.

1.17 a.m.

I think it was rather unkind of the hon. and gallant Member for Down, North (Sir W. Smiles) to remind his colleagues that the last time this subject was discussed was in the bad old days of Tory Government before the war. He said that in those days people in Lancashire were thinking of the debate with tears in their eyes. I think they will have more than tears in their eyes when they read that he believes that the reason for the collapse of world markets and the restrictions imposed in Australia and South Africa, and all the other consequences of the crisis we are discussing, was the speech of the right hon. Member for Bishop Auckland (Mr. Dalton). But it really is depressing that we are back discussing unemployment in Lancashire.

Many Labour candidates were chided during the General Election for talking about this subject. They were told in the Press that unemployment was a thing of the past and that they had no right to turn people's minds back. Yet here we are, having said good-bye to full employment discussing this depressing subject.

The hon. Member for Heywood and Royton (Mr. Sutcliffe) pointed out, for the most part, that Members on both sides have treated this subject as if this were a Council of State. I am bound to say that I thought my hon. Friend the Member for Rossendale (Anthony Greenwood) was far too kind to the Government when he opened the debate. When the hon. Member for Louth (Mr. Osborne) took up that unusually reasonable tone—unusual for the hon. Member—and said it was unreasonable to blame the Government, I found myself trying to imagine what would have happened had the role been reversed. What kind of speeches would hon. Members opposite have made against a Labour Government, led, no doubt, by the President of the Board of Trade in great form? They jeered when we on this side talked of trade recession, and had we been in power hon. Members opposite would have told us today that the trouble was all the fault of the wicked Government.

Lancashire is not so much in a mood of bravely facing a temporary recession; it is thoroughly alarmed, and with good reason, at the trend of events. The people of Lancashire see the spectre of mass unemployment, of the dole queues forming again, and the return of the soup kitchens and the pawnshops; and in this connection. I think that the President should drop the talk about this figure of 5 per cent. unemployment. That is perhaps the figure on the books, but the hon. Member for Burnley (Mr. Burke) and others have explained how false it is; and it only causes annoyance to the people of Lancashire because they know only too well that to say that unemployment is only 5 per cent. gives an entirely wrong impression. It gives the impression that those who talk in that way are taking the matter with far too much complacency.

We have some half a million people dependent on the cotton industry for a living, and hundreds of thousands more in other ancillary branches of the industry. The population in the industry is unfortunately much below what it used to be, and I have some figures showing how the insured population fell from 497,901 in 1929 to 248,890 in 1947, which is more than a 50 per cent. drop. In North-East Lancashire, where my constituency is situate, the fall has been even worse; from 155,981 in 1929, to 62,837 in 1947—which is a drop of nearly 60 per cent. Those figures, I suggest, put a different aspect on the argument we have just heard from the hon. Member for Louth, who was comparing the increase in production of various countries, including our own, from 1938 to the present day.

In 1938, the number of insured workers in the British textile industry had already fallen considerably, and that point should be taken into account when comparing the figures. The right hon. Gentleman also drew attention to the concentration schemes operated and operated very effectively during the war. They operated so effectively that they cost the industry about a third of its labour force.

There are three other peculiar features about the population of north-east Lancashire. First, 42.2 per cent. of the insured workers are women, as compared with 37.1 for the whole county; and that is one thing to bear in mind when one talks of shifting workers from one employment to another.

The second feature is that unfortunately a large proportion of the younger workers are not staying in the area. They are leaving because the industry seems to them to be dying, and they are finding jobs elsewhere, with the result that an elderly age-structure is being created which is not good for the economics of the district.

The third feature is that there is just outside that area a new developing industrial district around Preston and Leyland, to which, I am told, 2,300 male workers go every day. As soon as they can find houses in this new district they are going to move their families, which will mean more women workers taken out of the industry, thereby depleting the labour force still further. It may be that is part of the Government's plan but, if not, I hope they will take that into account when considering this problem. The local authorities are gravely concerned about it, because it is facing them with many new and serious economic problems.

I should like to mention also the position in conditions of unemployment and short-time working of many foreign workers brought here when the industry badly needed extra help. My hon Friend the Member for Blackburn, East (Mrs. Castle) reminded us that many of them had gone home; but many cannot do so for political and other reasons. They have to pay the cost of their hostels, and they find it impossible to do that on unemployment pay, and some of them are getting into a desperate position. I ask the Government to pay some attention to that, because we have a responsibility to these people.

As illustrating the seriousness of the situation in Lancashire, the Board of Trade Journal last week stated:
"The latest weekly production figures for cotton, spun rayon, and mixture yarns for the week ending 1st March, 1952, was very much lower, at 16.57 million lb. compared with 18.99 million lb. in the previous week."
The "Manchester Evening News," commenting on that, went on to say that 43 mills were closed all the week, and that the wastage of full-time workers in the spinning section was 973 and there was a loss of 300 part-timers. This brought the wastage for a fortnight to over 2,000. I call special attention to the fact that this is in the spinning section. Hon. Members who know the textile industry will realise the significance of that. It is the weaving side that is hit first, and we know that we are in for really serious trouble when the spinning section begins to be hit. In my constituency there is a spinning mill which has just stopped for the first time since 1923. All during the last depression it was able to carry on. Now it has stopped. That sort of thing is not lost on the people of the district.

The President of the Board of Trade mentioned more diversification. My constituency is relatively fortunate, in that it has more diversification of industry than some neighbouring towns, but nevertheless it has serious unemployment and under-employment, and the whole town is suffering. It hits the other subsidiary industries of the town. There is a large factory there which prints textiles. It went on to a four days week last week. There is another mill with not one stripper and grinder. That is a skilled job, but men are leaving this skilled work for work that is not so well paid because of this feeling of insecurity. It is a terrible thing which is beginning to creep through the industry.

Most Members have mentioned the Australian ban, but there are two things I want to say on that. I learn from my constituency that Australia has put a stop on all the goods in the pipeline—has put a complete ban on all coloured textiles. It has been suggested to me that as a temporary measure the goods which are now held up should be diverted to the home market. Whether that can easily be done I do not know. It may be that it would clash with Government policy, because I believe that the Government want to restrict purchases on the home market for certain economic reasons and have taken steps to see that purchasing power is cut.

Why is there this shortage of sterling in Australia, when last year the price of wool rose about four times? I am not an economist, but as Australia last year got for her wool four times what she got in the previous year, it beats me why there should be a shortage of sterling there this year.

The hon. Member of Ashton-under-Lyne (Mr. Rhodes) drew attention to certain excessive dividends, ranging up to 45 per cent. I am told that one of the difficulties in the trade at the moment is that owing to an old custom of the trade there is an automatic profit margin at each process from the grey cloth to the finished article. Therefore, when there is a small increase in one of the early stages, that multiplies itself through the subsequent stages and gives an artificially high price to the finished product. Perhaps that matter could be examined by the Government,. or by the trade.

I am further told that even where some spinners and manufacturers have cut the price to try to keep the wheels turning, this lower price has not been passed on by the wholesalers or by the retailers to the customers. We have been told that one of the causes of this is a buyers' strike. But was not the buyers' strike to some extent contributed to by the party opposite which, a few months ago, promised that Purchase Tax would be abolished?—[HON. MEMBERS: "Nothing of the sort."] Many people told me that they were holding up the purchase of goods because they hoped that if there were a Conservative Government Purchase Tax would be removed. These people may legitimately claim that they have been let down.

The President of the Board of Trade also mentioned that Korea had started stockpiling, and that merchants and shopkeepers had bought over-large stocks in anticipation that prices would rise still higher. That is quite proper trading in the view of the party opposite; it is called private enterprise. They do that sort of thing to try to get a profit and not to see that the best goods are produced in accordance with the needs of the people.

In "The Times" today there is a leading article headed, "Unwanted textiles." It dealt with this point in a way that is worth quoting. It says:
"The trouble goes back to the spring and early summer of last year, when consumers abruptly broke off an orgy of anticipatory buying prompted by the Korean war and retired with palpable indigestion. Consumers, wholesalers and retailers, had all overbought in varying degrees. This sequence was world wide and little distinction need be drawn between home and export trades. Retail sales dwindled, especially those of household textiles, and stocks accumulated rapidly. By the autumn of last year wholesale textile stocks in this country, for example, had risen (in value) to one-and-a-half times the level to which they had been reduced in the spring, while sales had dropped by about a fifth. In consequence orders to manufacturers were steadily reduced."
"The Times" goes on to discuss possible Government responsibility in the matter.
"The Government's responsibilities in the matter are mixed and to some extent conflicting. On the one side is their plain duty to prevent serious and avoidable unemployment if they can. On the other is their duty to find more labour for defence work and for any industries which can increase their exports, to permit the operation of the natural cure for temporary indigestion in the textile trade itself—and to protect the pound sterling in its still perilous straits."
"The Times" goes on to say that:
"the immediate serious danger to sterling makes it imperative to prevent the accumulation of stocks and to encourage their clearance. This is what the new credit policy does."
There seems to be some justification for certain remarks made from this side of the House to the effect that the Government's new policy has affected the whole issue. When "The Times" puts it as cautiously as that, hon. Members are entitled to comment in their own way along the same direction of thought.

What are the remedies offered to us? So far, there has been practically none from the Government Front Bench. In opening, the President of the Board of Trade, made two points, that he would try to limit foreign competition and to divert Government contracts. There was nothing very definite, but he expressed the wish to do something in those directions. That is not going to satisfy Lancashire when it reads this debate. From our correspondence we know that Lancashire people have great hopes of the debate, and the Government ought to remember the word used earlier in this sitting by the Secretary of State for the Colonies and consider following a more robust policy.

I fully support the constructive suggestions made by my hon. Friends the Members for Burnley (Mr. Burke) and Ashton-under-Lyne, and I would call attention to the letter, referred to by the hon. Member for Rossendale, in "The Times" today, from Major Beddington Behrens, a well-known industrialist. Major Beddington Behrens made an interesting suggestion, that certain leading firms would be willing to take orders without charging any profit to maintain their operatives in employment. He says:
"Bargain prices could thus be obtained by the Government, which must need immense stocks of clothing to re-equip the armed forces and civil defence. It is better that such orders should be given now than later, when they will compete with civilian demand."
That suggestion might be worth following up by the Government, if they are looking for bargain prices at the present time. Another suggestion in the same letter was:
"If the workers in the textile industry are suddenly dispersed it will deal a body blow to future British exports, because the demand for British textiles has been due to their specially high quality—the product of skilled labour."
That brings me to comment on one or two suggestions that have come from the other side about the transference of workers from one industry to another. The idea in some quarters seems to be that because there are so many vacancies here and so many unemployed there it is a simple arithmetical matter to take the people from there and put them to work here. The hon. Member for Bolton, West (Mr. Holt), who sits on this side, although he ought to be over there, said that the weavers could go into engineering. Married women weavers are not suitable for engineering work, generally speaking.

Would the hon. Member allow me? I am sure this argument cannot hold water. Quite a large percentage of weavers in industry are doing this. I have been concerned with the transfer of these male weavers to engineering where they are wanted. That is not unreasonable.

The hon. Member is talking about carpet weavers. We are principally concerned today with the cotton industry, and any remarks I make must be regarded as affecting that industry. I would not attempt to argue with the hon. Member, particularly about the carpet industry.

The hon. Member for Bolton, West, also took the opportunity of mentioning the possibility of re-opening the Liverpool Cotton Exchange. We have it on the authority of the President of the Board of Trade that it is impossible to open the Exchange at the present time. He gave us cogent reasons, and I take his word for it. Whatever merits there may be in the suggestion of re-opening the Cotton Exchange, I seriously suggest that this would be the wrong time to do it. It is not the time when the industry is struggling with difficulties to encourage the kind of speculation that would follow.

On the question of buying United States cotton, the right hon. Gentleman mentioned shortage of dollars. The hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield) said that we were buying non-dollar cotton as a consequence. My information is rather different. What is happening is that we are buying American cotton, not from America but from other countries, and paying a higher price for it than if we were buying direct. If the Government would only release sufficient dollars to buy U.S. cotton direct there would be a saving under that heading.

May I quote from the speech, which has already been referred to, by Mr. George Hasty, President of the Federation of Master Cotton Spinners' Associations in Manchester yesterday? He said that
"a broadminded reception by the Treasury of our request for more dollars to buy American cotton would have the effect of bringing outside growths down to their right spinning value."
There is something else which the Government might investigate. I liked the suggestion that came from the hon. and gallant Member for Bedford (Captain Soames) about placing orders for clothing for Arab refugees in Palestine. That is a good practical suggestion which I should like to be taken further. I have great hopes for the hon. and gallant Member when his mind works on those lines. I can see him supporting the Colombo Plan and going on to other Socialistic methods. It is a common-sense proposal that, in a world where there are millions of people requiring clothing, it should not be beyond the possibility of this country, with idle looms and idle workers, to supply them. It is only a matter of organisation, or of international politics—of people getting together to work out ways and means. That is the ultimate aim of all our policy. It would result in our looking for a policy of expansion instead of the continued suggestion of restricting imports and exports and one thing or another.

I want to draw special attention to the home market, which is the principal market for the cotton industry. Here we are getting very little encouragement from the Government, because the policy of the D scheme, restriction of credit, the increase in the cost of living, and cutting down of purchasing power has all tended towards the opposite direction. Instead of the home market showing any signs of expansion it shows every sign of restriction in the near future.

I ask the Government to give some guidance to Lancashire as to whether they regard this as a short-term or a long-term policy. We have been told by many hon. Members today that they are confident and optimistic and that they have great hopes. But that is not enough. We cannot live on optimism and hopes. We want some positive action by the Government. I suggest that the Government might very well consider making northeast Lancashire a Development Area in order to give it the advantage of the special legislation applying to such areas.

It is the duty of the Government to help. The hon. Member for Heywood and Royton said that it was the duty of the Government not to interfere with industry but to guide it. I suggest that the Government have a bigger duty than that, a duty to the nation, which must supersede any qualms they may have about interfering with industry, if that industry is not satisfying the needs of the nation. I suggest to the party opposite that they must not allow any of their traditional opposition to planning to get in the way of bold measures to tackle this problem before it gets any worse. If nothing is done the Conservative Party will forfeit any support they still have in Lancashire. If we go back to the bad old days of before the war, they will never be forgiven.

1.47 a.m.

I agree with much of what has been said by the hon. Member for Accrington (Mr. H. Hynd). He referred to textile companies' dividends as did the hon. Member for Ashton-under-Lyne (Mr. Rhodes). I think he said that dividends should be limited to 5 per cent. I shall be very happy if Textile equities yield 5 per cent. in the next two years. I think many of them will forgo dividends altogether. And do not forget that in the years between the wars capital was written down considerably, and shareholders lost part of their investment. But my case this morning is not on behalf of the shareholders, but on behalf of the workers in my constituency.

The hon. Member referred to firms selling at a loss. One firm in Macclesfield was taking orders for rayon from Ireland before Christmas at a loss in order to pay wages, and that has been done for several months. Several hon. Members opposite have referred to November as being a significant date, and while they did not say that this Government was responsible, the implication was that it happened since the General Election.

I think I was the first Member, certainly in this Parliament, to raise the question of textiles in this House on an Adjournment debate on 23rd November, 1951. Last June and July salesmen coming back from the United States of America were telling me they were empty-handed of orders. Others could not get orders at home and in the Colonies, and there was a steady con- striction of trade in the silk and rayon industry. Silk is usually affected first in a recession of trade in the textile industries because it is a semi-luxury, or is thought to be.

In the debate on 23rd November, I said:
"The alarming thing is that in my constituency, which is concerned with weaving and the manufacture of silk and rayon, orders, both from abroad and at home, have steadily been declining since the summer. … as I see it, the textile trade may be in for a very difficult time. I should like to think it was only a phase, but the industrialists who have spent their whole lives in this business do not seem to think it is."
I also said:
"If we wait until next April before something is done many firms will be bankrupt and many thousands of people will be out of work."
My right hon. Friend, who had only been at the Board of Trade a fortnight, could not have been responsible in any way for that situation in November.

Would the hon. and gallant Gentleman tell us, if there were so many indications in the rayon industry as well as in the silk industry, as I think he said, that the market was tightening to that extent, why was it that production of rayon in this country in November reached the highest point, I believe, for any time?

Production may well have reached the highest point, but it was not sold. They were quite right not to stop production because the fall in sales might only have been a temporary phase, perhaps due to the dislocation of work because of the General Election. I hoped it was. In my constituency some of my political opponents said it was a stunt and that workers were being stood off because of the Election. I only wish it had been. I would willingly have suffered any humility that might have come my way if that had been true.

I find myself somewhat confused. The hon. and gallant Gentleman has just said that industrialists in his constituency, with virtually generations in the trade, were themselves aware that this was not a passing phase but was something which was foreseeable ahead and they believed it would be critical and severe. If that experience was there and that fact was known by them, can the hon. and gallant Member explain to the House how it is they ever produced so fantastically so recently when they knew perfectly well it was coming?

In my constituency we manufacture pure silk and rayon, and it was rayon mainly that was over-produced at that time. When the Parliamentary Secretary replied to that debate he said:

"I am certain that the House will appreciate that actual harm might be done to the industry whose cause my hon. and gallant Friend has so eloquently pleaded if we were to treat as permanent a shortage of work which may be destined to be only temporary."—[OFFICIAL REPORT, 23rd November. 1951; Vol. 494, c. 837–8, 841–6.]
That was way back in November, and it would have been quite wrong of the Government at that stage to have taken drastic action which might have turned the whole industry upside down only to find afterwards the buyers coming into the market again. But now the time has come when the Government have to take very drastic action in many directions.

We have had in the last three Parliaments an all-party silk committee, and I have had the honour and privilege of being its chairman on all three occasions. As a small body representing the silk constituencies we have worked extremely well together in facing our problems boldly and, on a non-party basis, in putting forward to the Ministers of the day suggestions which I think sometimes have been appreciated.

If we are to export textiles, a flourishing home market for quality goods is absolutely essential. It is no good Britain manufacturing a lot of cheap textiles. Other countries can do that, and cheaper than we can do it. We have to produce quality good in the production of which generations have been trained—beautiful garments which will sell at competitive prices. But it has been admitted on all sides today that foreign competition tends to increase, and our manufacturers have to adjust themselves to new conditions. I do not say they have had a honeymoon for seven or eight years, but they have had a seller's market. They must get together more and pool their ideas and methods. There are many things they can do. They work extremely well together in the rayon industry—except for a few who will never work with anybody. Sir Frederick Goodale is now chairman of their association.

I ask the President of the Board of Trade not to look upon silk as a luxury. Silk is a very fine material, but it is used in many different ways for strengthening other textiles and improving them. I should like to see an international agreement which would bring about the stabilisation of silk prices. We have had fluctuations in the prices of raw silk from Japan which had to be paid for in dollars. Perhaps the Minister would tell us what progress is being made. It would certainly be an advantage to the silk industry and to textiles of a high quality if the Government adopted the principle that, over and above a certain wholesale price, no additional tax would be chargeable.

The D scheme has had a very mixed reception. In the industry I should say that more were against it than were for it; but do not let us forget that it was the Labour Government which drew up the terms of reference for the Douglas Committee, and in my view the terms of reference were far too narrow. Had they been wider we might have had quite a different report; but that is too late now.

Whatever advantage the D scheme may have is largely negatived because the rate of tax of 66⅔per cent. is still too high to encourage the production of high quality goods. I am afraid we are going to have less high quality goods produced, and I think it is quite wrong to classify silk, cotton and rayon and nylon all in the same category for the purpose of assessing tax. It would be far more realistic if silk and nylon were placed in the wool category. I am not a technical expert, but that is what I am told by the experts in the industry. Apparently the basic costs are similar and that is a very good reason for it. Special provision has been made for linen in this respect. Many linen household textiles are in a category bearing a higher exemption rate than similar goods made of cotton or rayon.

In connection with the Australian cuts of imports, my sympathies are to some extent with the Australians in their economic difficulties. It is a vast and complex problem. The hon. Member for Accrington (Mr. H. Hynd) asked why this had been brought about. It has been brought about for the reason that the price of wool has been up twice and down twice in the past 18 months and the Australians have spent hundreds of millions of pounds more abroad than they have exported. They bought mostly from this country and they can no longer go on doing it.

But I think that the way the cuts have been introduced has been quite wrong apropos the British manufacturer, because his business with the Australians is always done on trust; letters of credit are rarely opened; whereas the Czechs, the Italians, the Swiss and the French who trade with Australia mostly insist on letters of credit. This means that orders placed in those countries by the Australians will be honoured but in the case of Britain, where no letters of credit have been opened, I understand that the goods will not be accepted. Where the goods have been sold, but not through letters of credit, I hope that the Australians will be persuaded by some means or another to accept goods where it can be proved that they were genuinely ordered before the date of the import cuts.

Much has been said about diversification of industries in the textile areas. I quite agree that we do not want to break up these industries. They bring us much foreign currency. But let us remember and be realistic about it. Other countries are producing, or will produce, far more textiles than they did before the war, and my own view is that the volume of textiles that Britain can export will be less than hitherto. We have to accept that. I am not a pessimist, but I believe that we have to make up for it in quality and in value. We may achieve the same figure by better methods.

So we may have to face the fact that there will be a considerable number of people who in future cannot be employed in textiles. If we have to have a rearmament programme in the next few years, which appears to be necessary, the Government should bring some of the light engineering industries into places like Macclesfield and Congleton, where 70 per cent. of our trade is textiles.

It has been said that textile workers are unable to do the other type of work, but I do not believe it. During the war the textile workers turned over to making difficult components for the aircraft industry—it was skilled work—and they can do it again.

I have listened to the hon. and gallant Gentleman with great attention and a very great measure of agreement. He is right in saying that he called the attention of the House to this earlier than anybody else. I intervene because I believe this to be a vital point. The loss of the textile industry from 1914 to 1918 was due not merely to the war but to the fact that, in war conditions, we had to develop textile industries overseas and turn our workers into armament industries. When operations were over, those workers had nothing to which they could return, and fear of that exists now.

I am grateful to the hon. and gallant Gentleman for mentioning re-armament. The word has not been mentioned for a long time; it appears to be regarded as a naughty word. Is not the position that if we drive the textile workers into armament industries we shall help to build up the textile industries of other countries and there will be nothing to which the workers can return when the re-armament programme is finished?

That is a fair point, but unfortunately, the re-armament programme has yet to get under way. We heard recently how little we have got out of it. Even if we had not had a rearmament programme, we should still have had the same situation in the textile industry. Fifteen hundred people in Macclesfield alone, apart from Congleton, are partly or wholly unemployed. The re-armament programme might make a difference in the long run, but it has not so far done so. Some of the light engineering industries ought to be brought into these more difficult areas.

An industrial site has been prepared in Macclesfield and some of the services are available. Yet last August the Labour Government gave the North Western Region Gas Board a permit to establish a new showroom, with enormous plate glass windows and demonstration rooms, in the middle of the borough. I have seen the chairman of the North Western Region Gas Board and am convinced that in normal times this would have added to the efficiency of the industry, but I contend that that was the wrong time to issue such a licence when I cannot get a licence, for a smaller value, for a firm to build a comparatively small factory for manufacturing goods of an important nature in the town. I blame the Labour Government for that. People passing through the market place are horrified to see this showroom, for it could have remained in its former premises for a year or two until the lease ran out. That may be a minor point in this House, but it is an important point in Macclesfield.

Congleton, which was almost a distressed area before the war, is going through a difficult time. There was recently a fire in one of its textile mills, and as result 400 or 500 people were thrown out of work—many fortunately have obtained other work. I hope that the Government will give an assurance that the licence will definitely be given for rebuilding the mill.

Another firm not actively employed in textiles had a Government contract for packing since 1943. That contract is now going out to tender again, and 150 people may be stood off work next week. I have put the facts to the Ministry of Supply, and I hope that some action will be taken.

I want the Government for a short period to look upon the textile areas as semi-development areas and feed them with work. If the people on the spot are asked whether they would rather make ailerons for new types of fighter aircraft or stand on street corners kicking their heels, they will say that they would prefer to work. Nothing is more demoralising than for men to be out of work for any length of time, and so I hope they will be given work.

I have one request to make to the Minister regarding supplies of material to N.A.T.O. countries. Could it be arranged that parachutes made of British nylon could be supplied with the aircraft? I believe that the Purchase Tax should be adjusted. I have read the debate which took place during the war. The present Leader of the Opposition said then that he thought it was tax only for the duration of the war, but he continued it after the war for six years because it suited him to do so. The textile industry should have initial allowances for replacement of machinery continued, otherwise the mills may not be capable of keeping up to date. These allowances should be continued for at least another year.

I should like to see a Commonwealth conference, not of Finance Ministers, but of Prime Ministers, together with their financial and trading advisers. We often have requests in this House for a meeting of the leaders of the four great Powers, but in my opinion it is equally important that the Commonwealth Prime Ministers should get together. The meeting should not necessarily be in London, but if they really got down to the task much could be achieved. Unless we pull together as an Empire I believe that we are all in for a rough time. It is our only salvation, and I hope a Conservative Government will accept this opportunity at an early date.

2.7 a.m.

I am rather sorry in one respect that my first speech as the Member for Droylsden should be coinciding with a serious and rapid deterioration in the conditions of employment of the people who reside in the four towns which go to make up the Parliamentary Division of Droylsden. I feel that I would be almost a super-optimist after all these hours of debate to think that I could make any novel contribution, but it seems to me that there is a common theme throughout the whole of our discussion. It is that the situation in the textile industry is grim in the extreme, and as far as I can see the situation is going to get worse still.

We are all agreed that unless we are very careful the serious unemployment that has developed in some of the N.E. Lancashire towns is likely to have a serious adverse effect on other industries not only in that area but in other parts of Lancashire and the North of England. I am afraid I cannot claim expert technical knowledge of the textile industry, but after some experience in the trade union world I am not sure that is always a disadvanage, for I find that if one gets a sufficient number of experts together they eventually cancel each other out and there is a chance for powers of observation and deduction to become more effective than the experts' knowledge.

Be that as it may, the situation has deteriorated so much in my own constituency that I thought it desirable to make a special investigation. I decided the best way to do that was to get in touch with the employment exchanges in four towns. I did that, and I am bound to say that it would be incorrect to state that the situation in Droylsden is as bad as say in Nelson, or Colne, or Burnley. But what I must say is that the situation, even in a constituency like Droylsden, which is not entirely dependent on textiles because it has some diversified industries, is deteriorating rapidly and to such an extent that where one could count the wholly unemployed or temporarily stopped in tens or dozens six months ago, we must now unfortunately count them in hundreds. So, what must it be like in areas such as those represented by the hon. Member for Nelson and Colne (Mr. S. Silverman) and other hon. Members from Lancashire?

I have spent a good deal of time in Lancashire between the two wars. Some may argue that when in Liverpool one is only on the perimeter. [AN HON. MEMBER: "It is the capital of Wales."] Well, some of us think that it might be even more influential than Cardiff, although, for my own part, I would back Caernarvon. But I hope that hon. Members will not tempt me any further on that point. What I was saying was that I have 20 years' experience of Lancashire. I was there during the inter-war years. I saw some of the depression even on the Liverpool side of the cotton industry in those days, and I know from personal contacts of the terrific depression in Lancashire between the wars.

When renewing association with Lancashire once again, I found that there was a sense of security in the county which had been very much absent in those inter-war years and that security had brought happiness to the homes and the lives of thousands in the area. It is, therefore, all the more tragic so far as I can see that, for the third time in my experience of the county we are now once again in the trough of depression. Two things are likely to happen as a result. Those in the textile industry are going to lose their confidence for ever in that trade, and there will be a position similar to that which some of us saw in Wales years ago, where the people lost confidence in coal and the quarries, with the result that parents refrained from sending their sons into what were the traditional occupations of the areas.

I am satisfied that we are reaching the point in Lancashire where the people are losing faith and hope in the textile industry. The more I go round the various mills, the more I find skilled workers leaving the industry; workers difficult to replace in an emergency; and management and union officials assure me that the people who are going out in these circumstances are not likely to return. That is the view held by managements and workers in that area.

The second point that occurs to me is that unless we are very careful some of the towns in north-east Lancashire may have to make an important decision shortly—whether they are going to continue to place their faith in the textile industry. Are they going to depend solely on textiles? Are they going to place all their eggs in the one basket? It seems to me that despite the fact that, to carry out the wishes of Sir Stafford Cripps and the Labour Government when they were in office, they undertook the responsibility of relying on cotton, thinking there was a future in it, if they are going to experience this depression again they are inevitably bound to ask themselves if they can afford to do it, and they will press the Government to bring them some other industries not so liable to the fluctuations of world trade and the slumps which the textile industries have experienced over many years.

I was rather intrigued and not a little perturbed by one or two remarks of the President of the Board of Trade. He said the problems are such that they must be grappled with and resolved by the industry itself. I know from notes of a meeting he had with representatives of the industry in November that he made it clear that he regarded the solving of these problems as being a matter for the industry. I am not one who denies that there is a great part for the people in the industry to play in the solution of these problems, but there are elements which are beyond the capacity or skill of anyone engaged in the industry.

The basic core of this problem is international, and must be dealt with internationally. Unless there is stability in raw material allocation, prices and distribution on an international level, nothing that the industry can do will be anything but abortive. I should like an assurance that the Government are taking up this matter seriously, and not just remitting it to the industry and hoping that it will alleviate in due course some of the distress. It must be solved between Governments.

That leads me to ask how many conferences are taking place between Governments of the Commonwealth on these issues. We never hear anything about them. I have here the Colombo Plan, Command Paper 8080. Some of us placed great faith in the potentialities of that plan. But one hardly hears anything about it. One wonders what has happened to it. There are elements in that plan which might be useful for discussion between Governments in regard to the issue we are now discussing.

I agree with those hon. Members who say that colonial development is something which can very much affect, and improve, the conditions in the textile industries here: but we do not hear very much about it. I hope that the hon. Gentleman who is to reply to the debate will lift the veil a little and let us into some of the secrets with regard to the discussions which are taking place at international level on some of these important problems.

With some trepidation I refer to the Australian restrictions. It would be improper for me, or for any other hon. Member, to give the impression that we were challenging the sovereignty of any member of the Commonwealth. But I do not think it is improper in a family of people for one member to suggest kindly to the other members of that family that they have made a grievous mistake in enforcing cuts of a particular extent and at a particular time.

We could point out to our Australian friends that there are mills in the constituencies of many of us which are committed up to the hilt in the Australian market, and that those concerned are wondering what they are going to do with the goods which they expected to deliver to Australia. Someone has had to finance these goods which probably will have to be sold at prices less satisfactory than would have been received for the contracts with Australia.

I do not think it would be unreasonable to ask the Parliamentary Secretary to say what discussion took place in the London Conference on this issue, and, more important, whether it is proposed to ask Australia and others, in the light of what has been disclosed in this debate, to review the situation. I do not think it would be difficult, because we have already had expressions of opinion from Australia which show that there are people there who are disturbed by the Australian Government's decision. I cannot help thinking that if the cuts had been imposed by a Labour Government in Australia there would have been a furore in the British Press, which seems to have been strangely quiet as the decision was made by a Conservative Government in Australia. But the British Press has been strangely quiet.

Dr. Evatt has said that he regrets the Australian Government's decision and that he thinks there will be serious repercussions upon Australia herself in due course. But I leave that; it might be regarded as a biassed opinion if I quoted him. Here is the "Melbourne Herald" not the "Daily Herald"—in which the financial editor says:
"The real answer to Australia's difficulties is to be found not in reducing imports but in increasing exports. Australia must beware of the 1930 mentality, which envisaged a solution wherein every country should sell more and buy less."
Then the writer adds this caustic comment:
"This opinion still seemed to survive at the 1952 London conference."
The important part of the quotation is in that very caustic comment, and I hope the Parliamentary Secretary will meet that point.

I refer to one other subject, as one who has spent a lifetime in the trade union movement. Although the Government can do a tremendous amount and will have to undertake great responsibilities if we are going to revitalise this industry. I still believe that the people in the industry have a tremendous part to play. Never in the history of this industry has greater goodwill and co-operation been required if it is going to overcome the many problems that are approaching. It would not be a bad idea if the President of the Board of Trade whispered in the ear of some of the people on the managerial and administrative side of the industry not to be too silly at the present time in pressing for certain things that they may think are very justifiable in normal times, but which, if pressed too far now, could produce a deadlock and complete lack of goodwill.

I see the Minister of Labour is here, and I believe that he will subscribe to my view. Never did the industry require more goodwill and patience than now. If it means a bit of give and take on both sides, that is better than that men and women should suffer as they suffered in the inter-war years.

2.29 a.m.

It has been an interesting debate, in that there is such unanimity on the seriousness of the situation and in that suggestions have come from both sides on how the situation can be improved.

There was a very interesting speech by the hon. Member for Ashton-under-Lyne (Mr. Rhodes), who attacked the profits that some textile companies had made in recent years. I agree that some of the profits, quite frankly, have been too high. These were not profits obtained in the ordinary way of business. Many of them were largely automatic increases in the value of stocks and not ordinary profits. These fictitious inflationary profits largely disappeared in high taxation. When a loss is faced, as it will be in many cases in the near future, it means that there is much less capital to meet it than previously.

As to the supposed high dividends, many companies started with small capital many years ago and ploughed back their profits to improve and extend machinery. I think that the hon. Member would find that the dividends paid on capital actually used in these companies was very moderate indeed. If he takes the dividends paid in the previous 20 years up to the war, they would be in most cases minute.

Certain Members opposite have tactfully suggested that this slump first became noticeable about last November. The textile industry, as all Lancashire Members know, is complicated in that it really consists of four or five completely separate industries which people call the cotton industry. There is spinning and weaving, finishing, merchanting, and there are different stages for each of these. In some cases from the time the cotton goes to the spinning mill to the time it is sold in the shop it often takes two years. It means that the process of passing through the pipe-line covers a very long period.

The suggestion that the slump started in November and that the present Government have the responsibility of putting the industry on its feet again is not quite a fair one. Undoubtedly the last Government must bear some responsibility for the things it did, or did not do, which have led to the present position.

If the hon. Member suggests that the slump did not start last November but a long way back, how is it that Lancashire manufacturers could not accept Government contracts in connection with re-armament?

There were certain lines of goods in which manufacturers were filled up and for which they could not take more orders. The Government required these goods very quickly and, as they could not get them placed in Manchester, they were placed abroad. I think that to a certain extent the last Government are responsible for some of the difficulties of today. I do not want to over-emphasise but to put forward what I believe to be the case. First, the abolition of the Liverpool Cotton Exchange did not help matters. It has been explained by the hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield) that outside growths became necessary and were much more expensive to the extent of 5d. or 6d. a pound.

In the case of American cotton the standard line known as middlings before the war, known as symbol Atus today, could be bought more cheaply in New York and shipped to this country than is being supplied by the Cotton Commission today. I believe that on Tuesday, the day before yesterday, the basic price in New York for what was known previously as middlings and is now known as symbol Atus was 41.18 cents, which converted into sterling is about 35.3d.; to which should be added brokerage, about 1½d., and insurance and freight, 1.75d. per pound, making a price landed in Liverpool of 38.55d. per pound. That compares with 41d. quoted for the same thing by the Cotton Commission. That difference in price of a little over 2d. may not seem very great, but it is all contributory to higher prices and makes it more difficult to compete with foreign competitors when we have to quote abroad.

Since the matter is so clear, can the hon. Member explain why the Government, of which he is such an indignant and loyal supporter, does not propose now to re-open the Liverpool Cotton Exchange?

I gather that the matter is under consideration, and we are hoping for a report in the near future from a committee which is sitting on the matter.

There may be a report from a committee which may be sitting. But the hon. Member will recall that the President of the Board of Trade, in his very full and lucid explanation of his policy at the beginning of this Parliament, made it very clear that he did not propose to re-open the Cotton Exchange; and that he was really appointing a committee only as a kind of alibi in view of the representations made to the electorate during the Election.

I have nothing to add to that. What I am pointing out is that one case of the drawbacks and difficulties of foreign competition in textiles today is the action of the former Government in abolishing the Liverpool Cotton Exchange. As many of us pointed out at the time, when such a thing is once abolished it is very difficult to bring it back to life again—

These things which were built up out of custom over the ages, once they are destroyed, are very difficult to restore, and we warned the Government at the time. We are doing our best, because we think it will help the Lancashire industry to become competitive.

Another thing which did not help matters last autumn, when the textile trade was in a very ticklish position, was the free advice of the right hon. Member for Bishop Auckland (Mr. Dalton). That advice went round this country rapidly, and it went round the world. The whole position was very delicate at that time. A recession was expected and perhaps the right hon. Gentleman thought he was being clever by advising the housewives not to buy at that time. It would have been infinitely better for the industry, and this country, if there had been a slower slackening oft in the autumn. Instead of that, strange as it may seem, a great many people took the right hon. Gentleman seriously. That meant a stop in buying for a time, which had very serious repercussions. That is another thing for which the last Government were responsible. I will not go into the question of Government purchases on the Continent last year because that has been raised already.

Fourthly, the last Government did not anticipate the Japanese competition which was bound to come. We all knew it was coming, but the last Government did nothing to forestall it. We had great experience of it in the 1930s. The Japanese spindleage and looms were increasing very rapidly, and it was very evident that there was going to be serious competition from that quarter. I was one of the people of Manchester who criticised the Government in the 1930s very severely for not taking any action when this competition was so evident. I criticised the last Government for not taking action when it became evident again.

I should like to quote from a letter I received on Tuesday from a very experienced textile man in Singapore where, of course, Japanese competition in textiles is very severe. He writes:
"We are much concerned as to Government's intentions regarding the import of Japanese textiles this year. Government had been instructed to limit imports from Japan to the 1951 level, that is, to the value of 100 million dollars. In restricting the 1952 imports to the 1951 figures the Government has apparently overlooked the fact that the 1951 imports were the highest on record, and this market received millions of yards more than it could digest."
All the people in the textile industry in that market knew what was going on in 1951, and nothing was done here to stop it. I suggest that this Government will have to tackle this matter, and the sooner the better. It is probably happening in other colonial markets, and I suggest that while we have only certain powers and rights in colonial markets, the Government should impose suitable quotas where proper in certain cases.

This problem was discussed very thoroughly in the middle 1930's. It is probably more serious now than it was then. For that reason I hope that this Government takes it seriously and tackles it before rather than after the saturation of the markets with these goods.

Now I come to what are, I hope, constructive proposals. I hope that the Government, as far as it can with tact, will take a strong line about the Australian contracts. The whole of the export industries of this country—textile and other industries which rely on exports—have been built up on the basis of the sanctity of contracts and the good word of British merchants. Once we lose that we shall lose a great deal of good will for this country. Similarly, we expect to be dealt with in the same way by others.

I believe that most of the Australian goods now in dispute were sold on firm contracts. If they were sold on firm contracts the buyer in Australia is responsible for them, no matter what his Government do. His Government cannot legally write them off and say the country cannot pay for them. It is just too bad for the Australian importer if he has ordered too much. He must meet his deficit in some way or other. I am sure that if the matter is put fairly to the Australians they will see it in that light. If we lose the sanctity of contract the greater part of our trade will have to pack up.

I should like to say a word about Purchase Tax and the D level, about which we hear so much. I know this can be discussed at a future time, at greater length, and probably much more appropriately; but I hope the President of the Board of Trade will consider this matter most carefully. It deals very hardly with some sides of the textile industry, and there are many anomalies in it.

I will mention just two cases. The price of an all-cotton tapestry to the merchant is 13s. 4½d. and the estimated wholesaler's price, including his margin, is 15s. 7½d. The tax is 6s. 10d., making a total estimated selling price of 22s. 5½d. That, incidentally, is taking the price of cotton at 41d., which I mentioned earlier as being the price quoted by the Cotton Commission. If the maker could buy his cotton direct from New York at 2¼d. lower, the finished article would be about 5½d. less and the Purchase Tax would be 2d. less, because the whole cost would be less. That shows how every little bit should be saved.

Incidentally, if, instead of being all-cotton tapestry 15 per cent. of wool were introduced, it would slightly improve the fabric and it would avoid tax altogether. That is an anomaly which ought not to exist, because the brains of the trade will be absorbed entirely in avoiding tax when they should be producing as cheaply as possible.

In the case of the ordinary 16-inch roller towel cloth, if sold in the piece I am told its tax is about 8d. a yard. If it is made up into 2-yard roller towels the tax is 7s. 8d. per yard, and if it is made up in 2½ yard roller towels it escapes tax altogether. That is one of the many anomalies that I am sure could be ironed out; but I do urge the President of the Board of Trade to look into this matter of Purchase Tax most sympathetically, because it may help the industry very, very much indeed.

2.48 a.m.

I have been waiting for many hours to hear someone make an attack upon the Government and Government policy in its relation to the textile trade in the crisis in which it now finds itself. The last attack I heard came from my hon. Friend the Member for Blackburn, East (Mrs. Castle), and it was very refreshing to hear the next attack come from the hon. Member for Middleton and Prestwich (Sir J. Barlow).

The speech of the hon. Member for Rossendale (Mr. Anthony Greenwood) was also welcome from my point of view, but perhaps less unexpected than the one we have just heard. I think the hon. Baronet was a little hard on his Government. He seemed to be in conflict with them at many points. He thinks they are wrong about the Liverpool Cotton Exchange; he thinks they are wrong about Japanese competition; wrong about Australia, and about Purchase Tax. I cannot agree with the hon. Baronet on all of them, but I congratulate him on his speech. He may deviate to the right and he may be wrong; but at least he does deviate, and that is something.

I have found the debate extremely depressing, and Lancashire will also find it extremely depressing. I have heard hon. Members say—not all from one side of the House—that they have derived some sort of comfort from it. The comfort which will be derived from it in my constituency will be cold comfort. In Nelson last week 40 per cent. of the registered working population were unemployed; by the end of this week it will be 45 per cent.; and by the end of a month the figure will be even greater.

Did my hon. Friend refer to "the registered working population"?

Yes, Sir. My hon. Friend must bear in mind that Nelson is almost entirely a cotton town. There is a little spinning and a little of the other finishing trades. I do not say that the figures apply to Colne, for the position is not quite so bad there, but the president of the weavers' union and the executive members of all the textile unions in the constituency assure me that those are the figures for Nelson.

Do those figures include part-time work or are they the wholly unemployed?

They include some part-time work. They include some weavers who are doing some work and earning some wages but not earning enough to deprive them of unemployment benefit. The percentages which I have given are for workers in receipt of unemployment benefit in Nelson last week and the prognostications for the coming weeks.

The hon. Gentleman is right to demand some modification of the picture with which I began. On the other hand, not all the partial unemployment is reflected in the figures. A number of people are partially unemployed but, under the guaranteed wages system, their earnings, even part-time, are sufficient to disentitle them to any unemployment relief for the time being.

A further point—the President of the Board of Trade made it in his speech—is that many of the married women workers who did not elect to join the National Insurance scheme are now unemployed but do not appear in the figures. They are non-registered workers and are in no circumstances entitled to unemployment pay, and so the employment exchanges do not include them in their returns.

That is a very frightening picture, as everyone will agree. The matter seems to have been approached throughout the debate, with some notable exceptions, in a thoroughly unrealistic way. Everybody has talked about world conditions and the recession in the textile trades as though they were natural disasters and we were dealing with a flood, a tornado, or an earthquake, and all we could do was to organise first-aid relief.

This is not a natural disaster at all. It is something which we have created. When I say "we," I do not mean the present Government or this country alone. These variations in prices, the slumps, booms, or recessions, are things that are within our control if we are prepared to control them. If we are going to bring any comfort to Lancashire workers we must show that we are not merely prepared on a humanitarian basis to patch up their wounds but also prepared to prevent the disaster from occurring.

What has occurred? In 1945 this country was bankrupt. It was internationally insolvent. It could not pay its way in the world at all. We set ourselves to put that right. The thing that we mainly relied upon in those years was the export of cotton textiles. I am not saying for a moment that we relied on that alone, but I do not think it will be contested that without reliance upon the export of textiles from Lancashire we could not have put our international finances on a reasonable balance.

Surely the hon. Gentleman will concede that the first requirement of this country to contribute to financial equilibrium is the export of coal, which does not involve us in imports, as cotton goods do?

We have not been able to export much coal between 1945 and today. The hon. Gentleman will realise that is so. There is a good deal in the point, but I do not want to be led into what we might have managed to do. I am saying it is cotton, not coal, that restored our financial fortunes between 1945 and 1951. The hon. Gentleman will not contest that.

Then the hon. Gentleman finds himself alone in the House. He will alter his view if he pays as much attention to the cotton figures in those years, and studies them with the same understanding as he has already devoted to the coal industry figures.

That policy succeeded because Lancashire, which had suffered so bitterly in the inter-war years, especially from the fact that so many of its towns depended almost entirely upon cotton so that when cotton was depressed there was no living for anyone in the towns, did its patriotic duty. If Lancashire had resisted the appeals made to it by the Labour Government of the day, supported by the Opposition, to devote itself entirely to cotton production we would not have been able to get out of the red in our international finances.

What has the hon. Member in mind with regard to exports? What were the export figures, for example, for Lancashire textiles in 1949, and does he realise that the volume of textile exports have never exceeded 40 per cent. of 1937?

If the hon. Member wishes to make that contribution to the debate, I am sure that when his turn comes—and, as we now know this is exempted business, so he has an opportunity—he can make his case. But, without going into figures, I do not think that he contests what I am saying. He only intervened, if I may say so, to put something else to me about which I was not talking.—[Interruption.] I do not think that the hon. Member should be so amused; Lancashire is not amused. What I am saying is that Lancashire accepted the appeal made by all responsible leaders of political and commercial opinion of the day to turn its back on the old memories and to devote itself loyally and patriotically to building up the textile industry; and, had it not done so, we should not have been able to balance our accounts in the international phase.

What I am putting to the House is this. If these towns in Lancashire—those which had suffered most in the inter-war years by being "one-industry"places—had, in fact, resisted the appeals made to them, and had said, "No, we are not going to do that any more, but we will have some cotton and rebuild some parts of the textile industry, but are never again going to put all our eggs in one basket," nobody in 1945 would have resisted them. Those towns could have had as much diversity of industry as they wished. Nelson could have had as much as anywhere if Nelson had said that was what it was going to have.

Would the hon. Member have brought the labour from Birmingham and Coventry in order to start these new industries in Lancashire?

In 1945 there was a sellers' market, not merely in cotton, but in a great many other things. There were people going about looking for factories and looking for workers, ready to build new factories in new places; and if these towns of Lancashire, which were one-industry towns, had said, "We will not be one-industry towns any more," they could have diversified their industry then.

The hon. Gentleman knows my constituency which is adjoining his, and he knows that we tried to start a business in refrigerators there, but his party killed it by Purchase Tax.

What the hon. Member says, and accepting it for the purpose of the argument, and without going into all the inferences he would apparently wish me to draw, is that a new industry went there; but if it did not succeed, that was due to extraneous forces, and it is not a fact that this industry could not be attracted to the area. Constituencies which wished to diversify their industry could have done so at that time. They did not do so. They accepted the appeals made to them, and it is for that reason alone that in my constituency the percentage of unemployed is so high. Apart from the general economic or political questions involved, that fact lays a moral obligation on the Government to see that they do not suffer from the public spirit they showed between 1945 and now.

Why? Why does that place a moral obligation on the Government? There is enough moral obligation on the Government without anything that may have happened between 1945 and now. The obligation is there to start with.

Then we understand. The hon. Gentleman will go to his constituency, and I invite him to come to mine, and explain to the people unemployed that they need not have been unemployed, that they could have had other industries if they had wanted, that they had only the cotton industry because they yielded to a national appeal, that they are now unemployed through no fault of their own, if you like through no fault of anybody, but that these facts do not impose on the Government any obligation to see that the burden is borne by anybody but the workers.

What I was saying is exactly the opposite: that the moral obligation is there in any case. I cannot understand why the hon. Gentleman has been maintaining so hard all through this long story that this placed some special moral obligation on the Government.

I find it difficult to understand what the hon. Member says. Is he saying there is a moral obligation, or there is not?

Then what is he complaining of? I am saying that there is a moral obligation on the Government to see these people do not suffer, and the hon. Gentleman says there is a moral obligation on the Government to do so, so I do not see why he wants to prolong my speech by numerous interruptions in order to agree with me.

I think I can assist the hon. Gentleman. I think the point is this. Is there a greater moral obligation towards 5,000 people in the cotton industry in a constituency with mixed industry, or towards 50,000 people in a town where there is only one industry? Surely the answer is that the moral obligation is to all people in the cotton industry, whether in a town of mixed industries or not?

I have said nothing which conflicts with that. The greater the suffering the greater the moral obligation. If a whole town is unemployed, there is greater suffering than if 5 per cent. are unemployed. The hon. Member must know what made the House long ago pass special legislation for special areas. It was precisely because the degree of social suffering in a town which is wholly, or almost wholly, unemployed is infinitely greater than the sum of the suffering of the same number of unemployed families spread through communities which are not completely unemployed. We must leave it if the hon. Gentleman does not agree with that. I think he will find that most social students take that view.

Whether it is a greater or a smaller obligation, we all agree that there is an obligation to see that they do not suffer. Let us see what are the consequences of that agreement. Our rates of unemployment benefit are low. [An HON. MEMBER: "Who fixed them?"] They were fixed by the Labour Government. The benefit is much lower now than it was when this Government came into power.

The Government have just announced a Budget which will take £160 million from the food subsidies. In their announcement they agreed that that would add 6s. weekly to the cost of the food for a famliy of four. It is true that the Government also announced certain reliefs in other directions which were intended to compensate for that extra cost. But none of those compensatory reliefs applies to the income of an unemployed man, because he does not pay Income Tax.

Let us agree that, as far as food is concerned, with a family of four he will be 3s. worse off with his basic 26s., which will be worth 23s. None of the palliatives recommended from either side and none of the long-term remedies referred to will do anything to relieve that suffering. I want to know whether the reward for the successful effort of these people for six years is to be not merely a reduced standard of living but one reduced even below the unemployment benefit standard created in 1945. Is there going to be any kind of special reief, or are they to be left to bear the burden until the Government make up their mind whether the cotton industry can be restored and when?

From purely humanitarian points, I come to general causes. Up to 1951 this effort had succeeded. Some capital has been made out of the Labour Government's placing of certain orders abroad in July, 1951. They were placed abroad because it was deemed urgent to have those orders completed early and the Lancashire mills were so fully occupied, and apparently were going to remain so, that there was no hope of getting early deliveries from them. In 1951 it seemed clear that the hopes of a stable textile trade in Lancashire were still to be relied upon. Everyone has commented on the suddenness with which the deterioration began and the speed at which it progressed.

The hon. Member will recall that soon after this Parliament assembled in November, Questions were raised in the House about one order for £50,000 for shirts from Italy, and the Minister replied for two or three weeks in succession that it was placed as late as October because we were morally committed. It was obvious even at that time that the cotton trade was short of work, and we should have put our own people first.

There may be something in that point, but in July, 1951, there seemed no reason to suppose that the crisis, which has now descended so disastrously upon us, was to be feared. What happened? There was a dislocation of financial stability over the world. Reference was made to Korea, but there was nothing in the Korean campaign itself to have any effect, one way or the other, on world trade as a whole. The Korean affair—I use an absolutely neutral word for obvious reasons—was made the legitimate and inevitable occasion in many people's opinion for sudden world-wide re-armament expenditure upon a vast scale.

I hope that no one will pretend that that has had no influence on the situation. I can quite understand those who say that this was something we had to do. It is a perfectly tenable view, and it has had many distinguished advocates on both sides of the House. It is not a view I share, but there were many and weighty arguments which led responsible and intelligent people to that conclusion. If one does come to the conclusion that it is necessary to do this thing, then one has to be honest about it and play fair with the people who are bearing the burden and paying the cost of it. One is treating them very badly indeed if one seeks to pretend that this sudden infusion of immense purchasing power for the purpose of taking materials, labour, and services out of the production of consumer goods into other goods, had no impact at all on international financial and economic arrangements.

It plainly is not so. It is something we could have avoided if we had taken a different view. There is no doubt that this attempt to spend so much more money—not merely in this country but everywhere in the world—has had the most disastrous effect on the balance of international trade in every country in which the attempt has been made. It is not to be supposed for a moment that the textile crisis is only a textile crisis. It is clearly part of a general trade crisis largely occasioned—I would say wholly occasioned—by the distortion of the whole international financial machine by the attempt to spend more money than one has on goods that were not there.

The whole effect has been to destroy the financial stability of the Western world, at any rate, in order to get increased armaments which in fact it could not produce. The result was merely to get less armaments for more money. I am not arguing that in relation to the problem we are discussing. I am saying this was the first and most important cause of the distortion of world finance that has produced general insolvency almost throughout the world. At that moment a number of other different things were happening, because obviously the first result of worsened conditions is that one is less favourably placed in one's customary and traditional markets.

Our old trade competitors in Japan and Germany were rebuilding their industries so that at the moment when our own position was being adversely affected by financial changes due to world-wide rearmament, we were getting increased competition in the markets we had been able to establish, or re-establish, since 1945. This, at any rate, could have been minimised by wiser political handling. No one suggests for a moment that the Japanese ought to be prevented from earning their living because if they do it somehow interferes with the people of Lancashire earning their living. But Japan had on her doorstep a vast market in China, and we allowed ourselves to become parties to a political settlement in the Far East which had the effect of depriving Japan of this natural market in China.

This is not merely politics, because if we go back on a treaty between the de facto Government in Japan and the de facto Government in China all sorts of consequences flow from it. If we do not have a treaty of peace and the Governments do not recognise one another, we can have no commercial understanding, no trade, no consular offices, no banking or credit facilities and no port or shipping arrangements. And the consequences of having no political settlement with Japan and the de facto Government of China is that virtually we bar Japan from her natural market in China and virtually invite them to compete with us in our own markets when that need not have happened at all.

The hon. Member brought up this point about a fortnight ago. Before the war Japan could sell her goods to China and still there was this Japanese competition with the rest of the world. I agree that Japan has to live, but I do not feel that is arguable on this point.

The hon. Member did me the honour on the occasion to which he refers to intervene in my speech to say the same thing as he has just said, and I will give him the same answer. The fact remains that whatever the situation was before the war, if in the present state of the world there is no political understanding, no political settlement, between Japan today and China today, then there can be no Japanese-Chinese trade today. If this vast Chinese market were open to Japan today, is there any hon. Member of this House who does not think that would be an ameliorating factor in the Japanese competition in the markets of this country about which everybody complains?

All right, let them increase production. There are plenty of people in the world today waiting to wear clothes. Hon. Members must bear in mind that if we believe the author of that remarkable book "The Geography of Hunger"—and I see no reason why we should not—of every three people who die in the world one dies of hunger, and their clothing is not much better than their food. There is no reason to be afraid that the world cannot absorb, if proper arrangements are made, all that the industries of the world can produce. There is no reason why we should fear each of these countries building up their own textile trade. There is plenty of room in the world for the production of all of us for at least more generations than we need bother about tonight.

That is one thing, but there are certain other consequences. Here we have one thing, a disastrous political arrangement, on which ultimately we were double-crossed by the United States, about the recognition of Governments. One result of it was to keep Japan out of her natural markets and force her to compete with us in other markets where competition need not have happened. But there is something else. Until 1920 Lancashire herself had a valuable Chinese market which the Japanese were able to get from us in the years that followed. One would have thought that one compensating advantage of the disasters of a foolish political settlement in the Far East would have been to give us an opportunity of recapturing that Chinese market. But we did not try.

Although we have recognised the Chinese Government we still hold them at arm's length, and no attempt has been made so far to win back for Lancashire the Chinese market out of which the Japanese have been kept by political arrangements to which we were party.

The hon. Member must know that British traders in places like Shanghai have been quite unable to carry on. The other day we read of Mr. Robin Gordon of Jardine, Matheson, who was locked up because he was not able to pay the wages bill. They have made every effort to trade and credit should be given to them.

The hon. and gallant Member knows more about these matters than I do, and I appreciate that. I think he will agree with me—he is always fair-minded in matters of this kind—that the British trading community of Shanghai and Hong Kong have been by no means so pleased with the development of British-Chinese relations in the last year or so. I think they would agree with what I was saying when the hon. and gallant Member interrupted me, and I think he knows they would agree. There is a vast market waiting for us in China if we only removed political inhibitions.

I am sure the hon. Member will allow me to interrupt him. After all, the whole night is before us. I really must ask him in all fairness to say what more he would do to persuade the Chinese Government? What more can we do than we have done?

One thing I would do, and I only mention one thing now and do not want to debate it; whether anybody else liked it or not, I would back up the right of the actual Government of China to take their place among the rest of the United Nations.

Would the hon. Member really do that when the Chinese are shooting our troops in Korea?

We are shooting their troops, too. It seems to me that ever since September, 1950, the war in Korea has gone on only because the United States of America takes a different view about this matter of Chinese membership of the United Nations than we take. Only the other day an American statesman was saying that the Chiang Kai-shek handful in Formosa was an ally of America—and we are an ally of America everywhere in the world. I say that with suitable political conditions—the political conditions that would be a natural and logical consequence of our having recognised the Government in China—there would be a vast Chinese market ready for us to enter.

It does not only stop there. There are two ways of relieving competition in restricted world markets. There is the whole of Europe. I have heard hon. Members and the President of the Board of Trade himself say that we must carry on the old adventurous spirit and send out our people to find new markets. Would he tell me, at some time during the debate, what in the world the Lancashire commercial traveller is to do about the Battle Act? Where does he go to find these new markets? He could go behind the Iron Curtain. He might like to go to Czechoslovakia; or to the Balkan countries; the Baltic countries; or to the Soviet Union. But he cannot, because politics again have dropped a curtain between East and West Europe, from which both East and West Europe are suffering.

How in the world can Europe recover its financial and commercial stability if it remains permanently divided? This has nothing to do with ideology; it has nothing to do with politics, and it has nothing to do with religion.

It has a tremendous lot to do with textiles. If we have a lot of textiles to sell and they have a lot of timber to sell, is it not stupid that we should not be able to exchange our disposable surpluses with the disposable surpluses of others? It may well be that it is not possible to do a deal. It may be that it would be resisted, or that the terms offered would be too harsh, or that the mode of payment or the security of payment would be unsatisfactory. All those things are possible. But we know nothing about them if we begin by saying that we will not trade at all because of some political dispute. That is what the Battle Act said.

I should like to ask the hon. Gentleman, in relation to China, if it is not a fact that it has been the declared policy of the present Chinese Government, long before the Korean war started, not to trade but to be self-supporting—or if they did trade, to trade with the Soviet Union and not with Western Europe.

If the hon. Gentleman says it is no use my saying "No" it means that he is not interested in my answer, and if he is not interested in my answer I fail to understand why he asked the question. In my opinion, what he is saying is not so.

If the hon. Gentleman will do me the courtesy of trying to follow what I am trying to say, he will realise that I left the subject of China a few minutes ago. Quite clearly, if anything is to be done to restore Lancashire's trade it can only be by either winning back markets which we have lost, finding new markets, or relieving ourselves of competition in existing markets.

I should have thought that this was precisely the kind of thing that the British Traders Research Organisation was intended to do. If that organisation were still in existence one would have thought that this was the very moment when it might have been applying its resources to a research into where markets might be made available.

But this is the moment which the President of the Board of Trade has chosen for liquidating the organisation. It does not make sense. The organisation cannot have cost the Government very much. The President of the Board of Trade talks about sending commercial travellers all over the world looking for markets, but that will cost something. Yet he chooses this moment for disbanding that organisation.

With an opportunity offered to us to investigate the possibilities of East-West European trade, one would have thought that the Government would have encouraged those possibilities instead of frowning upon them and discouraging people from investigating them. A delegation has been at Geneva discussing the possibilities, and now there is to be an economic conference in Moscow.

Some hon. Members opposite wanted to go to the Moscow conference. I believe one has decided to go. One put down a Question to the Foreign Secretary. Instead of being encouraged to go and make such investigations on the spot as were possible, he was frowned upon and told that it was not in the public interest for him to go even to look. That was bad advice.

I have accepted an invitation to go, and I shall go. I cannot see that the textile trade will have lost anything if I come back with empty hands. [An HON. MEMBER: "Does the hon. Member propose to wear the shoulder badge"?] I beg hon. Members opposite not to mix up their policies with their prejudices. If they are really anxious to preserve the peace of the world, they should take every opportunity of patching up differences, removing mutual fears and rebuilding the world markets, and the world markets include the European markets.

If hon. Members opposite are not prepared to do that because of their political prejudices or for any other reason, it is idle for them to sit through the long hours of the night weeping crocodile tears over the sufferings of the Lancashire textile trade.

3.43 a.m.

The newspapers have recently told us that the students of Sfax University have solemnly declared that until Tunisia is liberated they will stay in bed. We appear to have pursued the opposite policy tonight and to have resolved to stay out of bed until we have discussed the matter before us as fully as we can. That is a more robust attitude. I can only hope that it will prove more effective, but I am not convinced of that.

We have had some extremely well-informed analyses of the crisis, but I have not derived any very clear idea of what we are going to do about it. The hon. Member for Nelson and Colne (Mr. S. Silverman) developed an argument which had the great merit of being logical. He said—and it is true—that the world re-armament programme had had an influence on the slump in the textile trade. He also told us, equally truly, that the fact that Japan and Germany are cut off from their natural markets does sharpen their competition against us. There is no denying this, but what the hon. Gentleman is really saying is that if you have less guns you can have more butter. But we have discussed all this before and a great majority of us on both sides of the House have come to the decision that we have got to have guns. We have got to get the guns if we are to have security at all, and in the long run security is more important than well-being.

The hon. Member for Rossendale (Mr. Anthony Greenwood) and the President of the Board of Trade very rightly said that, however long this particular crisis may last, the textile industry, and more particularly the cotton industry, is going to be faced with a grievous long-term problem arising first of all from growing foreign competition, and secondly from the fact that so many countries which did not manufacture textiles in the past are doing so now. We used to take refuge in the idea that high quality assured us a market. To some extent it still will, but there is no doubt, or so I am told by well-informed people, that the Japanese mills are already producing high-quality goods, and with the backing of American dollars it is not surprising. In these circumstances we must safeguard our markets as much as possible, and first of all our markets in the Commonwealth and Empire.

For 50 years or more British textile exports to the Commonwealth have enjoyed an extensive measure of imperial preference. That was strengthened in the 1930's by the introduction of quotas on a preferential basis in the West Indies and West Africa. This preferential treatment has been going on for so long that it is difficult to say exactly how valuable it has been to the textile trade. But we have been able to see that in those territories where we do not receive preference—the Congo Basin Treaty territories—we were not able to hold our own at all in the years between the wars, while we were able to hold our own in those other markets in the Commonwealth and Empire where preference was enjoyed.

I agree with what was said earlier by the hon. Member for Oldham, West (Mr. Hale), and I think that the Government should consider fairly soon whether something can be done to reshape our obligations under the Congo Basin Treaty. I believe an opportunity may arise quite soon. It may arise if the proposal for Central African Federation materialises. The status, at any rate, of Nyasaland and part of Northern Rhodesia would then be modified, and there might be an opportunity of exempting them from the provisions of the treaty which prohibits them from granting preferences.

Since the war there has been a more important change in the incidence of Imperial Preference upon British textile exports. That is the result of the agreement signed with Pakistan last April. Under this agreement the preference fell from 45 per cent. to 5 per cent. and the consequences have been really disastrous. In 1950, the year before the agreement was signed, we sold 67 million square yards of cotton to Pakistan. In the following year, up to a month or two ago, we have only sold 39 million square yards.

In the same time, Japanese exports doubled to 198 million square yards. They now sell 90 per cent. of the total rayon consumed in Pakistan, and we used to sell rather more than half. Meanwhile, Italy has ousted us from the position of being the chief suppliers of cotton yarn to Pakistan. We ought to look into these figures.

The House will be familiar with the events leading up to the treaty with Pakistan, and it will remember that when India was united, we received preference levels in India equal in value, more or less, to those India received in the markets here. That gave, roughly speaking, an equal advantage to both sides. But, when India was partitioned and Pakistan had been created, it turned out that we had about four times as much advantage in the Pakistan market as they had in ours. One cannot blame Pakistan for regarding this as unfair.

Had it not been for the General Agreement on Tariffs and Trade, however, we could have got round the table with the representatives of Pakistan and said, "If you will keep the preference margins more or less where they are, we will extend new preferences to you if you ask." But, because of this unfortunate G.A.T.T. agreement, we were precluded from doing that, and Pakistan, therefore, had no alternative to depriving us of our preferences, with the disastrous consequences I have mentioned.

The simple conclusion which I draw from all this is to ask the President to consider very seriously whether the time has not come when we should take the action necessary to free ourselves from the G.A.T.T., or at least from those provisions of it which preclude us from increasing the preferential margins we can give to other parts of the Commonwealth and Empire. We have only to give 60 days' notice of our intention, and if we say we are going to give that notice, I believe we would give new hope to Lancashire and confidence that something is really being done to safeguard markets we already have, and to secure new ones.

I find the hon. Member's argument an impressive one, but I would remind him that the present figures show that the exports of India are greater than those of Britain and Japan together.

I do not pretend that this action would solve all our problems, but would prevent the kind of disaster we have suffered in Pakistan.

Hon. Members on both sides of the House, and particularly on the other side, have said that we ought to have a Commonwealth conference now on this subject of the textile trade; but I put it to those hon. Members, and to the President of the Board of Trade, that if we have a Commonwealth conference now it will be a conference which will analyse problems but will not come to conclusions. But if the President of the Board of Trade, on behalf of the Government, would denounce these provisions of the G.A.T.T. to which I have referred—denounce this treaty which ties our hands at present—then we should call a Commonwealth conference and say, "We are now in a position to give you these increased margins of preference," and then we could also ask, "What can you do for us?"

I suggest there would be new hope of saving our markets on these lines. It seems to me that that would be a constructive policy, and I ask the President of the Board of Trade to ask his colleagues in the Government to consider whether action could not be taken upon it in the near future.

3.55 a.m.

I hope that the hon. Member for Preston, North (Mr. Amery) will not think me discourteous if I do not follow him in his argument. I want to develop an argument which has been passing through my mind, and if I were to do this and also reply to the hon. Gentleman the House might think perhaps that I was taking too long. My constituency suffered as much as any during the years between the wars, and although it seemed as if confidence had returned completely, it is a fact that large numbers of workers now feel the gravest anxiety about the position in the textile industries.

I would feel more confidence in the future if that anxiety were shared by Her Majesty's Ministers. During this debate I have had a feeling that they are by no means satisfied that the position is as desperately serious and urgent as it is. The speech of the President of the Board of Trade today was directed to showing reasons why the Government should not be regarded as having responsibility in this matter, and I was puzzled for some time as to why this should be so. Obviously, as individuals, hon. Members on the other side appeared to be very sympathetic when they were talking about unemployment.

I came to the conclusion at last that we were speaking different languages; that we on this side were hypersensitive about unemployment because it means so much more to us than it does to the party opposite, and that there is a deep cleavage between the parties on this issue. I do not make that statement without having gone into some detail as to the reasons on which I base that observation.

The difference between the parties is to be found chiefly in this: we on this side are pledged to full employment, and we recognise that there are some difficulties of great intricacy which flow from our acceptance of that principle. The party opposite are not so pledged. They do not believe in full employment. They have clearly stated so on many occasions, and recently and clearly in the debate on manpower and productivity. We on this side have suffered many jibes on many occasions from hon. Members opposite, and we have been jeered at in the Press, because of our belief in full employment, and we have been criticised in many learned journals.

It has been said that if we have full employment we have incipient inflation as its consequence, that we are asking for disaster if we persist in that policy of full employment, and that the only way out of it is to have a pool of unemployment. There are many economists of some standing who have taken that point of view, and pressed it, repeatedly. So far as the party opposite is concerned, even when we attempt to give them credit for believing in it, they demur. One of its most distinguished Ministers is a lawyer of great experience, a person whom I say, frankly, I respect so far as his legal qualifications are concerned, and to whom I offer tribute as a person and on the impecoable way he expresses himself in this House. I am referring to the Minister of Labour.

No one more authoritative can be discovered if one is to find out what is the attitude of the Conservative Government in relation to this question of full employment. I want to make it clear that I am not making any attack upon him. His words are clear. I will quote them. My right hon. Friend the Member for Blyth (Mr. Robens) had given the Minister of Labour credit for believing in full employment, and had said so. The Minister said:
"He,"—
that is, my right hon. Friend the Member for Blyth—
"also did me the justice of saying that he was sure I was in favour of a policy of full employment. I want to see a high and stable level of employment. That is my aim, and within that policy to achieve the other objects which we are going to discuss."—[OFFICIAL REPORT, 3rd March, 1952, Vol. 497, c. 53.]
Now there is a world of difference between full employment and a high and stable level of employment.

The difference here is one of real honesty. It depends surely upon what the hon. Gentleman means by full employment. If he means by this complete and absolutely full employment that, of course, is a palpable absurdity, because that has never happened, and never will happen. If, on the other hand, he means the absolutely true and only attainable object, he must use the words, "a high and stable level of employment" because those are the honest ones.

The suggestion made in the intervention is that there is some dishonesty by someone regarding the use of these terms. Let me say immediately that I do not for one moment suggest that there is any dishonesty on the part of the Minister of Labour, for the term was used with precision, and, unlike the hon. Gentleman who has just spoken, the Minister of Labour really appreciates the difference between full employment and a high and stable level of employment. He so distinguishes in the words I have quoted.

When we talk about full employment, we mean the type of attainable full employment that involves the controls and the policy which hon. Members opposite criticised for so many years and which so-called orthodox economists have criticised in their journals. The type of full employment we mean is that which, we acknowledge, keeps us on the brink of incipient inflation. The high and stable level of employment of the party opposite would allow for 8 per cent. unemployment.

The hon. Gentleman is trying to make a difference where none exists. "High and stable level of employment" is the phraseology of the White Paper on Full Employment, which was signed by the present Leader of the Opposition and the ex Lord President of the Council. It was a coalition matter, and I do not see why the hon. Gentleman tries to make capital out of it.

I am indebted for that courteous intervention. There need be no misunderstanding about this point, for the term was used in the White Paper.

It is clear that certain people had in mind a level of unemployment of about 8 per cent. I am not saying that the Conservative Party have indicated that they would like that level of unemployment. I should be delighted to hear from any member of the Conservative Party what he does mean by a high and stable level of employment, because nobody could be more shy about anything than they are about that. They always say that the term was used in the White Paper and that other people signed it. But I have found that our term "full employment" is frequently understood by members of the Conservative Party as over-full employment—a disgraceful, disgusting term that we have heard in this House on many occasions, always from members of the Conservative Party.

I do not know if the hon. Gentleman was in the House from 1946 onwards. If he was, he may remember that I pointed out on more than one occasion that the first public man to use the phrase "over-full employment" was the Foreign Secretary of the Labour Government, the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison), then Lord President of the Council, at a Press conference in August, 1947.

If the House feel that I should withdraw, I must say that I was speaking within my experience during my period in this House—a short period, but it extends over the past four years. I say that, whatever the origin of the term may be, I have heard it in this House on many occasions and never from anyone but a member of the party opposite.

As the hon. Gentleman has made an allegation, could he quote, giving, perhaps, some reference to HANSARD? He appears to be under a misapprehension. I never heard the term, except in the context stated in the intervention by my hon. and learned Friend the Parliamentary Secretary.

I am in the recollection of my colleagues. I can only state that it is within my recollection that the term has been used on many occasions here and always by members of the Conservative Party.

It is perfectly true that it was used by Lord Woolton some weeks after it was used by the then Lord President of the Council. They both meant exactly the same thing by it and it was quite justifiable. I asked the present Leader of the Opposition who was then Prime Minister—because I did not want there to be a misunderstanding—whether this statement of the then Lord President represented the policy of what was then His Majesty's Government, and the answer was "Yes." I will not quote the exact answer but he said it had a context. I had no quarrel with it.

Exactly the same use was made by the Lord President and by Lord Woolton of that phrase. The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) made exactly the same use of Lord Woolton's phrase as the hon. Member is now making. He asked what Lord Woolton meant. I at once wrote to "The Times" asking why the right hon. Member for Bishop Auckland put that question to Lord Woolton and not to his right hon. Friend the Lord President of the Council, who had used it to describe his Government's view some weeks earlier.

I am most indebted to the hon. and learned Gentleman for his observations. They do not detract in the slightest from the substance of my submission, which is that there is a substantial cleavage of opinion between the party opposite and the party on this side about our ideas concerning full employment. There is, therefore, greater anxiety on this side of the House in relation to unemployment than there is on the other. May I make this clear? Nobody on this side would have taken the same view as did the President of the Board of Trade concerning the 5 per cent. level of unemployment in the textile industry. The situation in the industry today is an economic crisis—

—and will become an economic catastrophe if matters are not dealt with vigorously and diligently by Her Majesty's Government. If I am wrong, and if the Parliamentary Secretary can assure me that Her Majesty's Government are as anxious as anybody about the situation in the textile industry, nobody will be more pleased to report the matter to my constituents than myself.

Up to the present I have had a contrary opinion, an impression from speeches opposite and from what was said by the President, that a certain part of these great industries are expendable, which, for reasons for which the Government are not in any way to blame, must go because they cannot stand up to the changed conditions in the commercial world.

That may be the correct view, but if it is, let the Government not conceal it. Let the Government clearly state that we shall be obliged in this country to carry on in future with very much smaller textile industries. If they say that, they could bring hope where there is now despair, because of the uncertainty of the present position.

At present the impression is given that the Government do not care; that they are going to leave the textile industries to their own devices and that they will not intervene. Consider what the President of the Board of Trade said today. He might have felt that we were holding this Government responsible for all the troubles which have come on the textile industries. I repudiate that view completely; I do not for one moment assert that that is so.

There is, however, a field of Government responsibility in relation to every one of the points to which the President referred, and my complaint is that he did not give us the slightest idea of what the Government were going to do about it For instance, he talked about worldwide decline. Nobody in his senses would say that this Government is responsible for the world-wide decline. But surely the Government itself should say that, in face of a world-wide decline, they have certain responsibilities; that they do not take any blame upon themselves for the position, but they feel that in relation to these industries they have a certain job to do.

But the whole attitude of the President was clearly to the effect, "How can you blame us for a world-wide decline? That is something for which no Government is responsible." From that point on we had no statement about what the Government was proposing to do. It does hearten me a little to realise that there are critics on that question actually on the Government side of the House. In the course of the debate there have been many suggestions that the Government should do this or that. It would have been a much happier state of affairs if those proposals and suggestions had come from the President himself, indicating that the Government were occupied about this matter.

Then the President spoke of the buyers' market, his second point, as if, because there was a buyers' market, and because we had to leave so many things to the industries themselves, the Government had no responsibility. If the Government are turning their back upon the industries, let them say so quite clearly. If, in fact, they accept responsibility let them please define the area of that responsibility and give some message of hope to people who are despairing at the present time.

Then we come to the third and fourth points, the problems of competitive efficiency and increase in unemployment. There, again, I ask the House to note that we did not have from the President any indication of what the Government is prepared to do. Not the slightest idea was given as to whether they had any policy at all. In fact, the position was so unsatisfactory that one of my hon. Friends suggested that the Government might be deliberately causing unemployment. While I dissent from that view, I accept that it does look very much like that.

Unless firm assurances are given from the Government Front Bench, the impression can easily be given that it would be most convenient if a certain part of these industries were destroyed and the people transferred to other industries. If that is their view, if it is part of their policy that, because of the difficulties we are running into in the world markets, it is better that part of the industries should be destroyed, the Government should say so. Whatever the consequences of their pronouncement might be, it would be honest.

The Australian cuts followed the conference of the Finance Ministers. We are left in as much doubt as ever, after the observations of the President, as to whether they did discuss the effect on the textile industries.

Personally, I acquit them of the suggestion that they did not discuss it. I do not think that such an important conference could have been held without their having any discussion at all. If, in fact, they did not have any discussions, if they entered that conference convinced that the textile industries did not really matter and they could turn their back upon them and need not discuss them at all, then this Government would be completely discredited and not fit to hold office a moment longer.

But if they did discuss the effect on the textile industries then surely, having discussed it, they would have made some pronouncement. It would not have come as such a surprise to them when the cuts occurred. When they did occur, we had a statement in the House concerning the sovereignty of the nations in the Commonwealth. Surely there is a clear inconsistency between the concept of sovereignty in that context and the degree of co-operation which it was suggested had existed in the conference.

If this is the degree of co-operation—I say nothing about the pressures the Australian Government were under—which exists at the present time, then the idea of that sort of co-operation is a mere sham and a disgrace. In the meantime, here is one of our greatest industries which is dying while the Government are doing nothing whatsoever about it. Apparently they have no policy in relation to this industry. If they have a policy, then in heaven's name, since the President of the Board of Trade himself has said nothing about that policy, the Parliamentary Secretary might fill the breach by telling us, in his reply, whether the Government have any views on this matter at all.

4.22 a.m.

The horn Member for Wigan (Mr. R. Williams) has an agreeable manner which belies the political platform "facts" which he tries to put over. He knows that the reference to the Government wishing to see 8 per cent. unemployment is based upon a complete untruth. The figure of 8 per cent. was taken by the Government Actuary as an assumption when working out certain figures in connection with unemployment insurance and when discussing insurance and full employment.

Would the hon. Member explain to the House why, if "a high and stable level of employment means" exactly the same thing as "full employment," the party opposite did not say simply "full employment" instead of using this other long and cumbrous phrase?

Because, as the hon. Member very well understands, neither at this time nor in the time of any Government has every single person who could be working in this country been working. It is dishonest to mislead people with a jargon expression and to use "full employment" when all that any Government has achieved is a high and stable level of employment.

Is my hon. Friend aware that this much discussed phrase "a high and stable level of employment" was not only used in the Coalition White Paper but was used in the White Paper on the distribution of industry published by the Socialist Government in 1948?

I am very grateful to my hon. and learned Friend for that additional information.

The moving peroration which the hon. Member for Wigan delivered when he said the Government had not defined the areas of responsibility in connection with the textile industry surely meant that he has not given much thought or study to what my right hon. Friend the President of the Board of Trade said in his opening speech in this debate. Clear areas of responsibility were laid down. Decisions were made about import licences being discontinued, quota arrangements being made with the Colonies and also the policy of diversification in the textile areas.

I think that what we have been able to put before the Government from both sides of the House have been additional points to which the Government might well turn their attention. One of the difficulties in the whole of this discussion has been that unemployment varies tremendously from place to place. In one of my own townships it reaches the same level as in Nelson and Colne, the division which the hon. Gentleman opposite represents. In another—about six miles away—there are just about 100 unemployed, which is about the same figure as that for the last two, or three years.

Do I understand that the hon. Gentleman is now saying that the meaning of "a high and stable level of employment," in political propaganda, is virtually the same as "full employment," meaning thereby nearly full employment, and something like total employment? In Oldham at present there are 33 per cent. unemployed in the textile industry. Is the hon. Gentleman now saying to the House that if that misery is spread over the country and averaged out, it does not matter very much? If he is saying that there is a serious situation? Is he also saying that the Government meant what they said and are going to do something about it—and if so, what?

I say that there is a desperately serious situation in one of my townships and there is a situation which has remained the same for the last three or four years in another one. That is the problem we have throughout Lancashire. It is desperate in some places and it is less so in others.

Let us turn to some of the causes and some of the remedies which the Government have put forward and others which have added to the list during this debate. Undoubtedly, we must turn our attention to exports. It is exports which have dried up, not only from this country but from all other exporting countries in the world. This, unfortunately, has been part of a long-term trend, as other countries have put in their own manufacturing equipment. I think there is no doubt about the truth of the suggestions of the hon. Member for Ashton-under-Lyne (Mr. Rhodes), who has such an extensive knowledge of the textile industry generally, that we must hold on to what we have, using all the bargaining weapons which the Government and the industry possess.

We must not allow a single yard of cloth to be lost, wherever we can get that by fair trading and by firm negotiation. As part of that fair trading and firm negotiation, the proposals which my hon. Friend the Member for Preston, North (Mr. Amery) put forward about the use of preferences and the repudiation, if needs be, of G.A.T.T. ought to be considered by the Government.

There are other points to which the Government can certainly turn their minds. One of these has been the importation of grey cloth for finishing in this country. As I add up the figures, there have been imported here for finishing something over 1,000 million yards between 1948 and 1951. They were imports, as hon. Gentlemen opposite know, which were arranged under the Socialist Government as part of the Socialist planning for the textile industry.

Does the hon. Gentleman remember that when these goods were imported it was necessary to get supplies from abroad, and that every loom at home was full of warps and we could not make them ourselves?

Perhaps I may continue before the hon. Member for Burnley (Mr. Burke) becomes too excited on this score.

I object not necessarily to the amount imported but to the relatively small quantities re-exported. Of over 1,000 million square yards in three years, only about 580 million have been re-exported. I shall be glad if my hon. and learned Friend can tell me, when he replies to the debate, what has happened to the over 400 million square yards which have apparently been absorbed in this market.

It was all very well importing Japanese, and also in later years, large quantities of Indian grey cloth for finishing and re-exporting to the low-cost colonial market, for which there might have been an argument, but nearly half the quantity has apparently not been exported, and that needs to be explained to the House and to the industry.

The other imports which have greatly concerned hon. Members and need explaining are the very large imports for re-armament purposes. The hon. Member for Nelson and Colne (Mr. S. Silverman) says that they were made to meet the needlessly rapid demand for rearmament in this country. I do not want to enter into a political argument with him, but why could not the late Government, when placing contracts, have placed the huge quantity of over 100 million square yards—which it could not get English manuafacturers to accept—in smaller quantities with properly negotiated break clauses instead of loading up the market so that delivery will not be completed until well past the middle of this year?

Does not the hon. Gentleman realise that the argument against that—which I do not accept—was that the whole thing was so urgent that it was not possible to wait? If the hon. Gentleman is now saying that that is not a good argument and that it was possible to wait, would he apply that argument only to cotton or does he think it valid for any other aspect of the rearmament programme? If he thinks the latter, he is in the same danger as his colleague who spoke hours ago of finding himself joining the group led by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan).

With his characteristic beguilement, the hon. Member has tried to make me say what I did not say.

I did not criticise the Government for placing re-armament orders at the time that they did, because no doubt English manufacturers could not accept them. I did criticise them for placing re-armament orders abroad in the quantities and for the length of time that they did and for not arranging, in accordance with normal commercial practice, break clauses, with compensation if need be, to make provision for eventualities which they could not then perceive.

The hon. Member was trying to imply that I said that the Government should not have placed orders abroad.

I am sorry if I did not make myself clear. I thought that the hon. Gentleman's argument was that it would have been possible to arrange these matters in such a way as to enable all or some part of these contracts ultimately to be fulfilled by English manufacturers. That could only have been done if all or part of the deliveries had been delayed. His argument concedes that some delay was possible. If some delay was possible for that, why not for other aspects of the re-armament programme?

Deliveries under contracts are apparently being delayed at least into the second half of the year in any case.

I am certainly not running away, but I am not going to be enticed into discussing the matter in other fields.

The hon. Gentleman does not seem to have listened to the President of the Board of Trade. The right hon. Gentleman made a perfectly fair statemeut about this, to which I took no exception. He made it plain that the circumstances were such that the programme of our defence requirements could not be met if we had not placed these contracts where we did.

If the hon. Gentleman has put the correct interpretation on my right hon. Friend's argument. I still find it difficult to understand in view of the fact that delivery is certainly not being completed until August at the earliest, and some are later still.

But that failure to deliver on the arranged dates is not confined to these contracts. It is true of every single item in the whole of the re-armament programme.

We are discussing textiles now, and not other items.

On the subject of trade negotiations much has been said about Australia, and I am not going to add anything, but more might be said about Argentina. In the last trade agreement negotiated the Argentinians undertook to grant licences for British textiles up to £4 million. I understand that in fact they have not granted licences for more than £1 million. In the meantime, we have been paying them large sums of money for their meat. They have been spending that money on textiles from Brazil, Italy, France and Germany. I would ask the Government, when they come to negotiate the next trade agreement this summer, to take a very tough line about getting Argentina to use the sterling to buy textiles from us instead of other European countries, whatever they may do about their neighbour Brazil.

Long-term improvement of employment in Lancashire falls into two parts. First, all possible assistance should be given to the building of plants to develop new textiles whether improvements of the different types of rayon, or the new fibres such as nylon "terelene" and others still being developed. The highest priority should be given to these development because the future of the British textile industry depends on bringing out new cloths and the use of these new fibres. To maintain our position both in the home market and in exports we must lead development in the world in these new fibres.

For all that the hon. Member for Nelson and Colne said, the previous Government did not encourage diversification of industry in East Lancashire. They seemed to take too much notice of what employers and some on the union side said about the need to keep new industries away in order to retain the workers in the textile industry during the boom days of the late 1940's.

I must say that I fell for the policy myself; but few said that it was unwise at the time, and experience since has shown how unwise we were to put all our eggs in the one basket. If we had shown wisdom, more industries would have gone there. The operatives then would have known that there was alternative employment, and might have felt that they could more easily accept the idea of redeployment and the adoption of new ideas without the risk of working themselves out of the only work or almost the only work that there is now in the district. Another aspect of diversification is that there would have been a stimulation of new ideas all through the district.

I am quite sure that, even at this late hour, it would be to the benefit of East Lancashire if a great amount of drive was put into the bringing of new industries to that part. If the Government, or if industrialists, want advice or information, we have not only the excellent voluntary organisation which is known to many hon. Members on both sides, and to which some belong. The local authorities are also working together to give information about facilities available, and when the Parliamentary Secretary winds up the debate, I hope he will express, with all the warmth he can, the acceptance of the idea that we must see new industries and further diversification in East Lancashire.

4.42 a.m.

Having been here ever since the start of the debate, I do not think I can offer much which will be new, but I will contribute a new accent; because, if I have any comment to make about the debate, it is that it has been very parochial. I want, geographically at least, to extend the scope of the debate.

Some people think that Scotland provides only spirits, ships and scenery. But, there are no fewer than a hundred thousand people whose wellbeing is tied up with this very industry which we have been discussing all day. In my constituency of Kilmarnock and area, in Ayr to the south, and in Central Ayrshire, we are already feeling the cold draught of unemployment that we used to look back on with a shudder, having experienced it before.

The President of the Board of Trade cannot be very proud of his performance today. He gave a very placid, and rather ponderous review of facts; a nice historical survey, but there was no attempt properly to analyse the difficulties of industry. There was certainly no solution propounded in his speech. We got the usual pronouncements and exhortations and nothing else. If in Lancashire, Paisley, Kilmarnock, Glasgow, people were hoping for anything from him they certainly did not get it.

In the debate some strange suggestions have been made. This matter of the diversification of industry: is it practical at this stage, with this Government, with the pronouncements which we have had on credit policy and building policy, to suggest new factories as a possible way out? In any case, it contains the seed of the despair which we have been suspecting, that the battle for the textile industry is already lost, and that the Government have accepted it as lost.

The hon. Member for Louth (Mr. Osborne) made one of the most significant remarks in the debate, but unfortunately he did not follow it up. In one of those rare flashes of insight which occasionally illuminate the gloom in which he revels he said that what we were facing was a crisis in the world capitalist system. We have had talk about a world wide recession in textiles, the Australian cuts and so forth.

Why was there a recession? It was due to the complete lack of confidence of traders, manufacturers and of the woman standing in the shop hoping to get goods at the right price. It was the lack of confidence in the future of industry created by the panic that raised the cost of raw materials of the textile trade to such fantastic heights.

Hon. Members opposite do not like price control. But what was needed was not just price control in the home market, but price control in international markets, and a joint buying policy. It was something we should have looked for from countries that were supposed to be co-operating militarily. The same co-operation economically would have prevented that fantastic rise that has bedevilled the textile industry ever since. I can see no hope of international action in the speech of the President of the Board of Trade. He does not seem to think the problem arises at all. But it is the first problem, and until we get that price stability and that return of confidence, with justice to everyone—producers, traders, manufacturers, and consumers—then this slump will go on.

I want to deal with a factor which has aggravated this slump. I refer to the Australian cuts. I put a Question to the Prime Minister on Monday. I asked him for something which in this debate I have heard asked for from both sides of the House, namely, a Commonwealth conference. Probably not every hon. Member agrees with the reason which I gave for holding such a conference—because of
"the serious unemployment in Britain, arising directly out of decisions of Commonwealth Governments."
I want to try to get some light on what happened at the last conference, and on whether this matter was discussed. From the Prime Minister's reply, it obviously was discussed. Otherwise, why should the Prime Minister have said:
"The Commonwealth Finance Minister's, after their conference in January, re-affirmed the need for frequent and comprehensive consultation between Governments within the Commonwealth on the problems of the sterling area. They stated that steps would be taken within the next few months …"
I am satisfied that the Chancellor of the Exchequer and, surely, the President of the Board of Trade, knew what those steps were going to be so far as South Africa and Australia were concerned, and the effect they were going to have on the trade of this country. If they did not, what were they discussing at the conference? Is there no confidence between the various heads of the Commonwealth these days? It is not what we were led to believe by the red, white and blue publications which poured forth from the Central Office.

And then the Prime Minister went on to say:
"It is not true that serious unemployment in Britain is arising directly out of the decisions of other Commonwealth Governments."
An hon. Member, speaking about the effect of a decision of the Pakistan Government, belied that fact. This cutting from a Conservative newspaper in Scotland, the "Daily Record," last week, "Australian import cuts hit Scots lace industry," belies that fact. I want every Lancashire and textile Member of Parliament to read, in the Prime Minister's reply,
"It is not true that serious unemployment has arisen directly out of the decisions of other Commonwealth Governments or from any other cause."—[OFFICIAL REPORT, 24th March, 1952; Vol. 498, c. 7.]
In other words, we have heard repeatedly today about 70,000 unemployed in the textile industry in Lancashire alone, but the Prime Minister says that is not serious.

I should like the hon. Member to do what his colleague did earlier, namely, to say part-time working and unemployed numbering 70,000.

I received a letter this evening from a constituent on a constituency matter, and at the end of it I read:

"I have learned, since starting to write this, that six more girls were paid off on Friday last, and that Dobson and Brown are now working short time, a fortnight in and a week out."
You can call that by any name you like, but the housewife calls it unemployment.

I have some constituents who rank as part-time and apparently are not even classified as unemployed unless they are out on a Monday in the middle of the month, and who are working three days in five weeks.

If this debate has proved anything, it is that the situation is serious, no matter how one chooses to describe the state of unemployment in the industry. For the Prime Minister to suggest that it is not true that serious unemployment has arisen in Britain from any cause is fantastic. Must the figure go to one million before it is serious, or how high?

I remember hearing my right hon. Friend use that phrase. I think he said, "from this cause."