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Orders Of The Day

Volume 498: debated on Wednesday 26 March 1952

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Consolidated Fund (No 2) Bill

Considered in Committee of the whole House, and reported, without Amendment.

Motion made, and Question proposed, "That the Bill be now read the Third time."

Textile Industry

3.32 p.m.

Last week 26 Maltese textile workers and a number of other European textile workers left this country to return to their own countries, to face, in many cases, a future of hardship and uncertainty. They went because they had become redundant in the textile industries of this country. Perhaps, nothing could symbolise better than that simple fact the change in the textile industries which has taken place in the past five years.

Five years ago many of us in the House were stumping Lancashire recruiting workers for the cotton textile industry, but those days of shortage of manpower have gone, and in the past few months the skies have darkened for hundreds of thousands of workers in the textile industries, not only in Lancashire but in all parts of this country. In the past few weeks groups of hon. Members on both sides of the House have been to see the Minister of Labour and the President of the Board of Trade to discuss the slump which has hit the textile industries with unparalleled suddenness.

I want to say that the Ministers have been most helpful. We have had a number of discussions, and I hope that both sides have benefited from the interchange of views which has taken place. But the situation has been deteriorating so rapidly that the Opposition felt that it was desirable to bring this matter on to the Floor of the House, so that hon. Members might have a chance of drawing the attention of the House to the plight of all our textile industries: for this is not a problem which affects only Lancashire or only the cotton industry but applies to many parts of the United Kingdom, and I hope that hon. Members will be able today to put the case for wool, rayon, silk, hosiery, carpets, and all sections of the textile industry.

I do not think that even with the greatest stretch of imagination pottery could be included in the textile industries, but, no doubt, my hon. Friend will have an opportunity later, in the small hours of the morning, of raising the question which, I know, is of the greatest importance to him.

Mr. Lewis Wright, well known to many of us in the House, and President of Weavers' Amalgamation, announced on Monday that he believed that this week in Lancashire there would be 70,000 cotton workers wholly or partially unemployed—that is, between a quarter and a fifth of the total labour force in the industry; and he added that unless the rot were stopped 200,000 would be unemployed by the summer.

In Rochdale this week 26 mills are on short time. In the Oldham area 12 mills are completely closed and 62 mills, the remainder of the number in that area, are working only three or four days during the week. In the Rossendale Valley and Ramsbottom mills which remained open throughout the worst days of the slump in the 1930's are now closing.

In Bacup, two out of every three cotton workers have experienced partial or complete unemployment at some time since Christmas. In Haslingden every one of the 28 mills has had stoppages of various degrees of seriousness since the turn of the year. It is feared in Lancashire that almost the whole industry will close down for 10 days at Easter.

In those circumstances it is not surprising that last Friday the representatives of 300,000 textile workers in Lancashire met together and called for Government action, or that on Saturday delegates from a million workers in Lancashire warned the Government of the consequences of any return to pre-war conditions in the textile industry.

The truth of the matter is—and I think that we must face up to this on both sides of the House—that we have been caught up in a world slump in textiles which is affecting every textile producing country. In the United States there is severe unemployment in the New England mill towns, and some mills have reduced their production by 50 per cent. In Canada for some months the mills have been working short time.

In the last three months of 1951 the textile crisis hit France, Holland, Belgium, and other textile producing countries in North-West Europe. In India production has been cut. In Japan the Government have recommended that production should be cut by 40 per cent., and already a cut of 30 per cent. has been effected. Indeed, one of the most alarming features for the people of Lancashire is the fact that this recession has come upon us at a time when Japanese competition has not yet made itself fully felt.

What the reasons for this recession are are not, I think, completely clear, but there are some features of the situation which, I think, are outstanding. One of these reasons was discussed in the United Nations Economic Survey of Europe for 1951. We are told in that that rising prices after Korea produced a buyers' spree in the early months of last year, but that did not last because people throughout the world waited for prices to fall. Retailers were unable to sell their stocks, and the order books began to feel the effect.

I think it is true to say that until world prices are stabilised the situation will remain as bearish as it is at present. It may take some little time to get a proper stabilisation of raw material prices, but I should like to see Her Majesty's Government taking action along international lines to see whether it would not be possible to stabilise the prices of raw materials used in our textile industries. That may take some time, but in the meantime there are other steps which I believe Her Majesty's Government should be able to take.

The first point I wish to put to the right hon. Gentleman is one which has been widely canvassed on both sides of the textile industry, and there is a most cogent letter in "The Times" today from Mr. Beddington Behrens on the same subject. What Lancashire wants to know is whether it would not be possible to expedite the placing of defence contracts with the cotton industry instead of doing it slowly and piecemeal as at present.

If only that step could be taken, I believe that it would go a long way towards getting the industry through the difficulties it is facing at the moment. I make this further plea to the right hon. Gentleman: if it is possible to help the industry in this way, priority should be given to those areas where virtually no alternative employment but cotton now exists.

During the past few years we have become so export-minded that we have tended to lose sight of the fact that over the last three years 75 per cent. of the total output of the cotton industry has been going to the home market. That means that the level of internal demand and purchasing power is a major factor in determining whether we have a high or low level of employment in the textile industries.

Perhaps at this stage I become just a little bit controversial, but it does seem to many of us on this side of the House that many of the things the Government are doing have the effect of cutting down effective demand; the present tendency is to inflate prices and to deflate purchasing power.

Last Tuesday, the day after the Chancellor of the Exchequer had wound up his "incentive Budget" debate, the President of the Board of Trade addressed the Drapers Chamber of Trade and told them:
"The problem today is not so much one of producing goods. The problem is to sell them."
He went on to add:
"I cannot whip the public into the shops or cajole them into buying."
I think we all welcome the very modest conception the right hon. Gentleman has of his responsibilities. It is true that he cannot force the public, but he can at any rate do something to make it easier for the trade to sell and easier for the public to buy. I do not think he is doing that, and I do not think the Government are doing that, because the more people have to pay for their food, fares, rent and rates, the less they have for buying clothing and household textiles. On top of that is the fact that the rising costs of fuel and transport, and the very doubtful Excess Profits Levy, are placing new burdens on the industry.

I do not think—and perhaps by this time the right hon. Gentleman agrees with me—that the D scheme has helped very substantially towards solving the problems of the industry. It had a very cold reception indeed from both sides of the industry. I do not want to go into the technical objections which have been advanced, and which the President of the Board of Trade knows much better than I do, but I do want to make this very simple point. The effect of the new scheme has been to bring an increased number of textile goods into the range of taxation, and it surely a little ironical that a tax which was originally intended to be a counter-inflationary device to restrict consumption should be still applied, and even extended in its sphere, at the time when, in fact, the completely opposite tendency is in operation.

I urge very seriously upon the right hon. Gentleman that he should consider raising the D level very considerably indeed. Perhaps, if only as a temporary expedient, he might go so far as to advise the Chancellor to remove textiles from Purchase Tax liability altogether until the pipeline is cleared. The really important thing at the moment is to get those high-priced goods out of the pipeline, which are clogging it at the moment. Unless the right hon. Gentleman is successful in doing that, there is a danger of bankruptcies in the industry, a danger of growing unemployment and, perhaps most important of all, a danger of a dispersal of the labour force which has been built up with so much difficulty.

I was glad to see that Mr. Hasty, President of the Master Cotton Spinners' Federation, yesterday urged the importance of keeping in the industry those skilled craftsmen and skilled women who have done so much to contribute to the greatness of our industry, because if those people leave the industry we shall not get them back again. There is another effect, too, and that is that if there is this uncertainty in the industry we shall not get the school-leavers coming in, and the average age of the cotton industry today is probably the highest of any industry in the country.

Perhaps I might now turn to what I conceive as being the long-term causes of our recession. I think that they have an even greater significance for the industry than the ones to which I have referred. They relate, of course, to the restriction of the overseas markets which are available to us. The principal cause of that is the development of textile industries in other countries. It is no good our closing our eyes to the fact that today other countries are producing textile products on a colossal scale.

Every textile producing country in Europe, with the exception of Austria and Czechoslovakia, has increased its total production of all kinds of textiles more than we have done in this country. In some areas there has been an increase of over 100 per cent. compared with before the war. What does that mean? It means two things. It means, in the first place, that those industries are able to satisfy the home demands of their own countries. But it means, too, that in many cases there is a surplus left over for export in competition with the goods which we are producing.

The same situation has developed outside Europe as well. In spite of the temporary recession in Japan, she has met with a fair amount of success in entering once again the African market. In Pakistan she has taken our place as the chief producer of textile goods. Nor do I think we should forget the Yoshida-Dulles Agreement, which was not only a grave diplomatic rebuff for this country, but was a step which may, in the long run, have a disastrous effect upon this country's economic structure.

India, too, has expanded her textile output enormously; new mills are being set up, and she is establishing her own textile machinery industry with the advice of British firms. I do not think that any one of us would begrudge anything that India can do to solve the tremendous problem of poverty that she has to face, and she is making progress. The amount of raw cotton which India will consume this year is twice as much as the average consumption of raw cotton in this country over the last three years. That is an indication of the enormous extent to which India has entered into the cotton markets of the world.

At the same time British companies, with British skill, British experience and British traditions, are starting textile industries in other countries. Lancashire firms are building mills in the cotton fields of Africa. The British Celanese Company, while it is paying off workers in this country, is creating a mill in Colombia, and so it goes on.

In those circumstances, with this enormous growth of competition with this country, it is difficult to see how our textile industries have been helped by the Commonwealth finance talks which the Government were hailing so recently as such a tremendous triumph of Empire co-operation. On the contrary, they seem to have aggravated our difficulties.

I have no wish, and I am sure that my hon. Friends have no wish, to criticise our good friends in any of the Dominions or to underestimate the difficulties they are having to face. I confess that I feel less inhibited about criticising our own Government. It is difficult to believe that when the Chancellor of the Exchequer took part in these talks he presented the case for British industry and British trade with that clarity which we normally expect of him. At the close of the Budget debate, the Chancellor used these words:
"When the right hon. Gentleman the Member for Bishop Auckland asks if there was any understanding that one sterling area country could cut imports from another, I say definitely, no. All aspects of this matter were considered, but we had no idea that that would necessarily develop as a result of our conference. …"—[OFFICIAL REPORT, 17th March, 1952; Vol. 497, c. 2057.]
It is difficult to believe that the talks could have been carried out under conditions of that kind, and it seems, reading between the lines in the Budget debate, that the announcement of the Australian cuts was to the Chancellor as much a surprise as the Yoshida—Dulles agreement was to the Foreign Secretary a few weeks before. There may, of course, have been some misunderstanding on the part of Australia. Whatever the cause, there is a heavy responsibility resting upon the President of the Board of Trade and his colleagues to secure some further alleviation of the damage which the cuts will do to our export trade and particularly to our textile industries. The effects of the Australian cuts on Lancashire alone will be a loss of £26 million during the year.

That is only part of the picture. The figures given in the "Economist" last Saturday show that the effect will be much more serious if all our textiles industries are taken into account. We may well lose £85 million of trade in Australia, £10 million in New Zealand and a further £10 million in South Africa. That is a total of more than £100 million of export trade in the textile industries—one-fifth of our total textile exports last year and probably one-quarter of the amount we reasonably expected to export this year.

Surely the President of the Board of Trade now thinks that it is urgent to discuss with the various Dominion Governments something more than the administrative details which he told us in this House the other day he was prepared to discuss. This is really a matter of life or death to many firms in various sections of the textile industry.

In the Budget debate on 13th March I do not think that the President of the Board of Trade was a very happy man. Earlier the same afternoon, he had been asked about the proposals which he was going to make for mitigating the effect of the Commonwealth Finance Ministers' Conference. What did he say? In reply to my hon. Friend the Member for Burnley (Mr. Burke) he agreed very frankly about the extent of the damage to the Lancashire textile industry, and went on to say:
"I am confident that the cotton industry will do its utmost to offset the effect of these restrictions by increasing their exports to other markets. …"—[OFFICIAL REPORT, 13th March, 1952; Vol. 497, c. 1557.]
Marie Antoinette and the cake were nothing compared with the President of the Board of Trade and the export trade. In what markets will the textile industry be able to expand? Incidentally, I think it is a very great pity that we should have closed the Government-sponsored British Export Trade Research Organisation at the time when its help was most urgently required. Where are the markets to which the President of the Board of Trade is to send our goods? Lancashire, Yorkshire and the other textile areas are wanting to know.

The President told us the other day that he was in constant contact with the Cotton Board on this subject. What was the result of that contact, and will he tell us today what advice the Cotton Board have given to him, and what hopes they can hold out of being able to expand into other markets from those which we have at present? Perhaps the right hon. Gentleman is contemplating that we can sell more cotton goods in the North American market. We have been trying to do that for the past five years, and we have met with only moderate success. Unless the right hon. Gentleman works a miracle, I do not think that there is much chance of persuading the Americans to cut the tariffs on textiles which we want to send into the North American market.

The right hon. Gentleman no doubt noticed on Monday a suggestion in the "Manchester Guardian" that Canada will be increasing her tariffs to keep out textiles from other parts of the world. That will be another serious blow to our export trade. Perhaps the President has the South American market in mind, and maybe there is more hope of success there than in other parts of the American continent.

We are shortly embarking on negotiations with the Argentine for the supply of meat. They want to sell their meat, and we want to sell our wool and textiles. Does the right hon. Gentleman intend to see, in the course of these negotiations, that the claims of our textile industries are not once again overlooked?

It may be that the President, too, has his mind centred on East-West trade. We know that the Secretary for Overseas Trade has been taking part in discussions in Geneva on this very problem, and it may be that the President will tell us what impressions he has formed as a result of these discussions, and what prospects he can hold out of selling our textiles behind the Iron Curtain.

There is another considerable outlet for our exports and that is provided by those backward areas which will benefit from an enthusiastic application of the Colombo Plan. I believe that certain aspects of that plan are shortly to be discussed in Karachi. It has been suggested in various sections of the trade Press that perhaps it would be a good thing for the Japanese textile industry to be able to expand into South-East Asia, and some such expansion may be necessary, but will the President of the Board of Trade assure us, when he speaks later, that he will see that the interests of the United Kingdom are protected during these discussions?

When discussing the backward areas, will the hon. Member remember that they are already heavily over-stocked, without exception, with textiles which cannot be absorbed at the present time?

I do not think that that is strictly relevant. The reason that they cannot be absorbed is because of the lack of purchasing power in those countries. If we had an effective application of the Colombo Plan it would automatically result in an increase of purchasing power in those countries.

If the Government cannot give us encouraging news on these points, perhaps they will tell us what their views are on the future of the cotton and rayon industry. Already, the number engaged in the industry and its total output are only a fraction of what they were before the First World War. We want to know whether that shrinkage will continue. Do the Government believe that the time has come when we should begin to concentrate our industry, let our labour force run down, and plan our output on the basis of potential long-term demand?

These are points which strike at the very root of the problem and which the President cannot afford to neglect in his discussions with the textile industry, because so long as there is uncertainty about the future he will have skilled labour drifting away and young labour refusing to come in. The Minister of Labour has said on this point that it is not the intention of the Government to run down the cotton industry and to create unemployment in order to man the arms industry.

All of us gladly accept the assurance of the right hon. and learned Gentleman on that point. At the same time, a serious problem does arise. In some areas there is a most unhealthy lack of industrial balance. Figures which I obtained yesterday from the Ministry of Labour through the research department in the Library show that in Haslingden and Nelson 66.5 per cent. and 67.5 per cent. respectively of the working population are engaged in the cotton industry.

Whole villages in North-East Lancashire are virtually dependent upon the prosperity of a single mill engaged in cotton. In whole areas there is virtually no alternative employment open to the people, and unemployment in those districts, however it is caused, is a terrible infliction, as thousands of people learnt in the depression of the 1930's.

Those areas need new industries, and I hope that the President of the Board of Trade will give us an assurance not only that the Government will place no obstacles in the way of new industries going to those areas, but, also, that he will go further and actively encourage alternative industries to go to the textile areas where a danger of redundancy exists.

In conclusion, I hope—and I hope with all my heart—that I have not stated the position and the problems of the industry in exaggerated terms. We do not want defeatism and we do not want empty optimism. It is a time when the textile industries and their representatives in this House need both clear heads and stout hearts.

I believe that the industry is today looking to this House for a lead, and we are certainly hoping to hear from the President of the Board of Trade what policy Her Majesty's Government intend to pursue. Surely all of us are united in wishing for the prosperity of these vital industries and of the men and women who labour in them. I pray that they and we may not be disappointed today.

4.2 p.m.

I welcome this debate. I think that it will be all the more useful for the speech by the hon. Member for Rossendale (Mr. Anthony Greenwood), which was a reasoned and balanced speech upon a serious subject. If I can, I certainly hope to keep the debate upon the level on which it has been started.

It is, after all, the task and responsibility of the House of Commons to draw attention to whatever happens to be the storm centre of the moment, and no one would have any doubt that many of our problems today are focused upon the textile industries which we now have an opportunity of discussing. I suppose that from a Governmental point of view no moment is ever ideal for a debate, for some plans have not yet reached fruition and others are still under discussion, and, in a sense, a debate can only photograph an industry at a certain moment in time.

Nevertheless, this debate is well timed. It comes at a critical moment in the fortunes of the textile industry, and hon. Members on all sides of the House will have an opportunity of elaborating freely and frankly on this problem as they see it both nationally and in their own constituencies.

Textile policy covers a vast field, and I cannot cover the whole of it, but I can set out the facts as I see them, I can give some account of the actions which have already been taken, and I can say something of the problems—there are many of them—that still remain to be faced. I do not seek to—nor could I—give all the solutions to the many problems of the textile industry. As the hon. Gentleman very fairly stated, some are indeed imperfectly within the control of any Government—but I can indicate the scope of the discussions which are taking place and our general approach to the matter.

Many hon. Members are well versed in the background to these problems and the turbulent history of these industries. They have brought much in the way of riches to this country and also, very often, much in the way of poverty. They still retain a great deal of the fierce individualism which inspired them in their early days. Twice, at any rate, the cotton industry has been the stage of a great struggle in world trade. Once was in the 1770's when Hargreaves, Arkwright and Crompton invented the spinning jenny, the power spinning frame and the mule, and enabled this country to sweep into and dominate the markets of the world, until, in 1913, our cotton exports reached the great total of no fewer than 7,000 million yards.

The second stage of that struggle, with the cheap labour of Japan and the rise of domestic industries in other countries, to which the hon. Gentleman referred, reversed in two or three decades the advantage which we had won and held for 150 years. I only want to say about that that the history of those events is not simply recorded in the dry statistics of the Trade and Navigation Accounts, but is written deeply in the hearts and homes of many families in Lancashire, and it is right that we should bear that in our minds when we deal with this problem today.

I now turn to the situation as it has developed. During the last war these industries were concentrated so that the maximum use could be made of the labour and the limited materials which were available. Many whose normal occupation was the manufacture of textiles turned to the sterner tasks which the national need at that time demanded. When peace came, the textile industries flung themselves with enthusiasm into the job of rebuilding the economy. Hon. Members on all sides will remember the efforts which were made to collect again the labour force of the textile industry and to attract women and girls back into the mills.

There was an immense opening. The world was hungry for goods which it had been denied for many years, and it was a world from which Japanese and European competition was still virtually absent. It is worth recalling that the men who faced those difficulties and seized those opportunities are the men who are facing the problems in the textile areas today which the hon. Gentleman so fairly described. We owe them a lot.

And the women.

The picture of a post-war boom which I have been describing has now changed. There is today a world-wide recession in the textile and clothing industries, and the United Kingdom is sharing in that recession. It is to be emphasised, as the hon. Gentleman very fairly emphasised it, that this is a world-wide problem. Japan is hit. America is hit. Japan has cut back her production. There is unemployment in the textile industries in America. As the "Manchester Guardian" put it this morning:
"There is no easy Socialist solution; there is no easy capitalist one."
That is the simple truth of the situation which confronts us.

The recession might have started earlier but for certain events, on which I should just like to touch. The House will remember that early in 1951 America started buying heavily for the stockpile, in particular wool. Wool prices soared. The price level of the wool clip in Australia rocketed and reached record figures. The purchasing power thus injected, and injected particularly into the Australian economy, provide a last-minute artificial stimulus to the post-war boom.

By March, 1951, the public all over the world, with the thought of Korea in their minds, were buying feverishly, with the fear of war-time shortages and of still higher prices ever present to them. During the same period there was the same intense demand not only for wool but for cotton and for rayon. By the early summer of last year, the world market was saturated with wool textiles, and by the autumn the trade recession had spread to cotton and to rayon. Buyers had stocked up and were holding off in expectation of even lower prices in a falling market. These events were taking place not only in our economy but throughout the economies of many other countries.

That was the situation which confronted me when I assumed my responsibilities at the Board of Trade. I want to describe some of the steps which I then took and proceeded to take in the months that followed, not because they were of any major importance or were decisive in their effect, but because I think it is right to follow this story out in chronological order.

The first problem that confronted me concerned the purchase of the raw materials of the cotton industry. It is of very great importance that a manufacturing industry should be able to obtain its raw materials on terms at least as favourable as those of its principal competitors. It can be, or might be, possible on a sellers' market to sustain some handicap of this character at the start. A multitude of handicaps can be obscured upon a sellers' market, but when the sellers' market turns into a buyers' market, handicaps of this kind become of paramount importance. This view, I notice, is shared by hon. Members of the Liberal Party, who have upon the Order Paper a Motion connected with this matter.

I am not discussing its merits.

The problem which confronted us was not made any simpler by the shortage of dollars, which restricted then and still restricts the amount of cotton that we can buy from the United States. The House will remember that the Minister of Materials and I appointed a committee under Sir Richard Hopkins, with the terms of reference that they were to consider and report to us how, in the current foreign exchange position,
"cotton could best be supplied to the United Kingdom cotton industry on the most advantageous terms as to quality and price."
I am pleased to say that the committee have tackled this job with great energy. They have made considerable progress, and I hope to receive and to publish their report quite shortly. I think the House will wish to take an opportunity, when it has the report in its hands, for a discussion of what is one of the most important aspects of this matter.

The second problem that confronted me concerned prices. The House will observe that I am dealing with these matters in the order in which they occurred. I am now talking of November of last year. It became apparent to me then that price control upon a falling market was contributing to some extent to the set-back in the textile and clothing industries. Goods manufactured from high-cost materials were held in stock. They could obtain few purchasers. Goods made from low-cost material were banked up behind them. Traders were being permitted to charge for utility goods only cost, plus a permitted margin of profit. There was no power to average between low-cost-material goods and high-cost-material goods. For some considerable period, complaints had been made that these arrangements constituted a block at what I might call the "exit" end of the industry.

In those circumstances, I gave instructions that the averaging of prices should be permitted. Although events have marched beyond this stage, it is worth while stating for the record that the size of the operation involved in giving even that measure of liberty to the traders required no fewer than 22 Orders dealing with the utility maximum price system and 303 pages of Orders, with their schedules—I understand that this time they were not related but were unrelated schedules. So complex was the machinery that had grown up that it took three months for the calculations of the new prices and the printing of them to take place, to do the simple job of enabling traders to average prices.

If I am asked why I did not then scrap the lot, the answer is that the whole of the machinery was inextricably bound up with the old utility scheme, many of the specifications of which were based on price control. Price control had therefore to be continued until an opportunity could be taken of dealing with the old utility scheme. These events impressed very clearly upon my mind the need to cut through this administrative tangle at the earliest possible opportunity, quite apart from what was told me in Lancashire and Yorkshire, and to which I shall come in a moment.

Shortly after this decision, I had an opportunity of visiting some of the textile areas in those two counties, and of discussing on the spot what, at that time, they considered to be the main problems confronting them. I do not propose to discuss at great length the D scheme—I am not in any way inhibiting other hon. Members—on which we have already had quite a long discussion during the Budget debates. We shall have further opportunities of dealing both with the D scheme, and with the Purchase Tax generally connected with it, in the course of the Finance Bill, particularly on the Committee stage.

However, it would be right for me to say that when these problems were being discussed, the greatest possible stress was laid on getting rid of the rigidities and frustrations of the old utility scheme. This step was held out to me by both sides of the cotton and woollen industries, by trade unions as well as by employers, as the one step which the Government could take to assist the textile industries. Indeed, it was impressed upon me that the matter was one of such urgency that it really could not wait for what, at that time, would be the ordinary date of the Budget, April of this year.

Could the right hon. Gentleman, in his enlightening of the House, now change from the passive voice to the active voice and tell us who made the statement? Many of us have received a very different impression of what took place.

The statement was made by many people. It was impressed upon me by the Wool Textile Delegation, by the Cotton Board, on which there are representatives from both sides of the industry, who were united on this matter, and by the Rayon Federation. It was put to me, not as a matter that would brook delay but as one of great urgency.

I believe that the arguments advanced at that time were well founded. Certainly, no alternative solution has been seriously put forward or seriously argued inside or outside the House of Commons that I have heard. It would be a pity if anyone at this stage tried to turn what is an essential reform of the old utility scheme into a scapegoat for the far wider and deeper problems confronting the textile industry at the present time.

I have mentioned these matters because it is right that the House should understand the order in which these problems presented themselves. Having said that, I want to repeat something which I said in the North three months ago. I said then that even if the Government did everything that was asked of them; even suppose they did all they should about averaging prices, about dealing with the problems of the old utility scheme; even if they improved the existing methods of buying cotton, there would be a vast range of problems of immense complexity confronting the textile industries which, if they were to be solved, would have to be grappled with not only by the Government but by the branches of the industry themselves.

Indeed, it seems to me that in some sense the matters of which I have been speaking so far, and which I was discussing with those people, important though they are, are marginal to the main problems confronting the industry. If they were left alone and unsolved and allowed to accumulate, they would do great damage to the industry, but even their solution, if it be possible, leaves many matters for further and urgent consideration. I therefore turn to the situation as I see it now.

As the hon. Member for Rossendale very fairly said, unemployment has been growing in the textile towns. I am anxious neither to overstate nor to understate the size of the problem which that creates. The fact is that in the textile industries unemployment, measured statistically, amounts to some 5 per cent. compared with rather less than 2 per cent. for industry as a whole. But in saying this, let me add that in my judgment and that of my right hon. and learned Friend the Minister of Labour, the figures, on the whole, probably tend to understate rather than to overstate the problem. Probably there is more short-time working than is disclosed in these figures and some married women are not included—to take two examples of the way in which figures do not necessarily give a perfect picture of what is happening.

Moreover, it is not possible to treat of the textile industry as a single whole. All these statistics inevitably cloak wide differences between one town and another and between one area and another. Again, to give but one example, unemployment is often clearly worse where there is very little diversification or other industries to go to.

These, then, are the problems that confront us: a world-wide decline in demand, the emergence of a buyers' market, the problems of competitive efficiency and an increase in unemployment. And these are the problems on which we are now engaged. For example, I had arranged some time ago for further detailed discussions to take place between the Cotton Board and myself upon these matters. I do not intend, nor would it be right, to state in advance of these discussions what precisely I consider all the answers should be. However, I can state our general approach to some of the problems which must be raised.

I do not think that I should be avoiding the responsibility of Government if I said that a large measure of responsibility for future action must inevitably rest upon the shoulders of industry itself. It is not part of the duties of Government to outline in detail the managerial and technical problems concerned with increased productivity. There is a mass of papers and blueprints upon that subject, but the truth is that if Yorkshire and Lancashire textiles are to hold or gain foreign markets—and I do not underestimate the problem which the hon. Gentleman put—they must make the most efficient use of all their resources, of labour, management and equipment.

We should be quite clear about the size of the problem which faces us. The Australian cuts are very present in our minds but, in a sense, they are only one example of what is a much wider problem, about which I will say a word in a moment. Since the hon. Gentleman referred to them, let me say this about the Australian cuts: it seems to me that where there are two Governments, one of which feels that it must take upon itself the unenviable task of cutting imports, and the other of which has the unenviable role of having the cuts imposed upon it, both Governments inevitably come under attack. The worst thing that could happen would be for Canberra and London to start trying to blame each other. Whatever our difficulties, it is worth remembering that, in the last resort, we face a common problem.

May I say, in answer to what the hon. Gentleman said, that, for our part, we have always made it demonstrably clear that we wished, if it were in any way possible, for Commonwealth countries to avoid cutting imports and exports between each other. Equally, the size of the problem which confronted the Australian Government is demonstrably plain. We have drawn their attention not only to details but, in the clearest possible terms, to the impact of their action upon the consumer industries of this country. We shall, of course, follow up that broad approach with detailed instances which are drawn to our attention by individual firms or industries affected.

The action of the Australian Government was a cut imposed by one country in an emergency. What we have to face also is the action of many Governments all over the world. The hon. Gentleman put this point to me very fairly. During the time I have been at the Board of Trade I have had an opportunity of studying what has happened to some of the old-established traditional markets of the textile industry. For example, in 1938 we exported 98 million square yards of cotton piece goods and 12 million square yards of wool piece goods to Argentina. In 1951 we sent less than 1 million square yards of cotton and 0.1 million square yards of wool.

I will not weary the House with lots of figures, but hon. Members who know this field well will bear me out when I say that the same kind of picture can be repeated in one traditional market after another throughout the world. Let us, therefore, be under no illusions as to the difficulties of breaking down these obstacles to trade imposed by foreign countries.

Since I have been at the Board of Trade I have given instructions—I gave them soon after my arrival—that the highest consideration should be given in all our trade negotiations to the problem of seeking to open out in any way possible markets for the textile industry. I might add that it should be remembered by those who sometimes urge us to restrict first this import and then that, on the grounds that in a very tight emergency they are not absolutely essential to bare existence, that if we do cut other people's imports they are very liable to cut ours, and they are very liable to cut British textiles, particularly the high grade British textiles in which this country excels.

However strenuous any British Government might be in these matters, the fact remains that we shall face very considerable difficulties in these restrictions. We are a long way from the days when we used to make piece goods for Brazil, India, China and the Far East, buying their raw materials and manufacturing these articles here. These countries manufacture their own. Indeed, one of the great problems which confront us is not so much competition from third parties, but that the country to which we have been exporting has itself set up its own textile industry and is prepared to supply its own market. It is common knowledge that one of the first actions of an agricultural community is to try to manufacture its own textiles and its own garments.

There is one type of competition about which I am anxious to have special further discussions with the Cotton Board—I have told them of this—and that concerns competition from Japan. I want to talk on two aspects of it—competition in the colonial markets and the import of grey cloth into Lancashire. As to the imports into the Colonies I would say first, that they are, of course, limited by quota, like imports from other countries, on balance of payments grounds. Also, they are lower than they were pre-war, but, as the hon. Gentleman has said, they constitute a very potential danger for the future.

Second, quite apart from the complexities of the Congo Basin Treaties, which those who are familiar with this field know so well, if Lancashire is to hold a substantial share of the colonial markets, that can only be done if she can produce at prices at least not too far removed from those which are available in other quarters. I have also asked the Cotton Board to give me their considered view about this vexed question of the import of Japanese grey cloth.

I should be obliged if the right hon. Gentleman would say a word about the Congo Basin Treaties. I would remind him of the Anglo-French Treaty which relates to free imports into Nigeria: that was denounced in 1936. There was also the Anglo-Dutch Treaty of 1871, which applied to the Gold Coast. Why are some of these treaties always permanently inviolable, whereas all other trade treaties which are not to our advantage seem capable of being denounced?

The legal position is in such doubt that it is very much better not to embark in an impromptu answer upon an analysis of what it is. I do not wish to avoid the hon. Gentleman's question, but, while I recognise that these difficulties are there, I would prefer in this speech to concentrate on the practical problem of filling that market.

On this question of grey cloth, I know that opinion is deeply divided in Lancashire. On the one hand, it is said, with some justice and conviction, that if Lancashire's full production has not been taken up grey cloth should not be imported. On the other hand, it is said that if we import it, it at any rate keeps the finishing end of the industry in full employment, and, indeed, it has provided a basis upon which the colonial markets so far have been largely held.

Can the right hon. Gentleman say how the finishing industry will have more employed in finishing foreign cloth than in finishing Lancashire cloth?

This cloth is used by the finishing industry to turn into products for the colonial market. I did preface my remarks by saying that opinion is deeply divided on this subject. What I can say is this—and I think the House might be interested to hear it. I understand that there are considerable stocks of grey cloth at the present time, and for the present, at any rate, I do not intend to issue any new licences.

There is one other matter to which I should like to refer, and that is the question of diversification. As I have already said, the textile industry in the post-war world seized upon the opportunities in those markets and it was decided at that time—I am not criticising the decision; I am just stating the facts—not to detract from that effort which was so valuable to our economy by seeking to diversify the industry. No doubt, there were powerful arguments for that decision at the time it was taken. There was, after all, a considerable labour shortage in the textile areas. My own view is that there is some danger in any area becoming so dependent upon any industry that there is likelihood of large-scale unemployment in the event of a falling off in the demand for its products.

I want to make it plain that I am not implying that the textile industries have failed. What I recognise is that we live in a constantly changing world, and, if it is in any way possible, it is wise in that world to have facilities for taking up some of the slack at times of low demand. I am not trying to define the future level of the textile industry—although the hon. Gentleman has asked me to assess it, and I do not blame him for doing so. But I think it would be a bold man who, amidst all the imponderables of today, sought to say that he could see a little into the future and say exactly what size these industries were going to settle down to.

In addition, new factories cannot spring up overnight. There are severe limits on steel and building capacity. I do not want to hold out any hopes of actions that can be taken. I will say that, within the stringent limits within which we necessarily live, applications by firms for new capacity will be considered sympathetically in this as in other areas faced with this kind of problem, and certainly we shall encourage firms to use vacant premises where the great practical difficulties of taking them over can be solved.

The hon. Gentleman asked me a number of questions which I would like to answer. He asked me particularly about contracts. I think that we have to look at this question of Government contracts in perspective. It would be wrong to overrate what can be done by placing Government orders. It is wrong to hold out high hopes which would be only disappointing in practice. The quantities of textiles needed for the whole re-armament programme are small in relation to the total capacity of the industry. In cotton, they are the largest, but for the whole four years' programme of re-armament cotton represents only 10 per cent. of a single year's output of the Lancashire mills.

Much is said about the placing of orders abroad in textiles and clothing. The facts are that in the time of the previous Government orders were placed for £36 million of which £25 million were in Europe, £8 million in Japan and smaller amounts in India and the United States. This, again, was based on the fact that at that time there was a shortage of capacity. They were placed in the spring and summer of last year. As soon as we were aware of what was going on, we reversed that policy. Some orders were signed later, but only where negotiations had reached the point where public faith was pledged and failure to sign would involve either a breach of contract or a gross breach of faith. Wherever possible, we cancelled orders. We succeeded in cancelling orders placed in the United States or reducing them from a total of £1,750,000 down to £750,000.

In December, my right hon. Friend the Minister of Supply gave instructions that no future orders were to be placed, except for the most special reasons and then only with his personal authority. Very few contracts have, in fact, been placed and these are of a specialist character, which could be defended individually. This policy will be continued in the future.

Is the right hon. Gentleman referring to cotton only, or to textiles, or certain other things as well?

When I spoke of the total amount of orders placed by the previous Government I was speaking of all textiles, including clothing. The orders already placed amount to half the total re-armament requirements in the case of wool and three-quarters of the total rearmament requirement in the case of cotton.

That is for defence contracts in the United Kingdom. It has nothing to do with contracts placed abroad.

What I am speaking of are Service contracts placed with the Ministry of Supply. I am speaking of all of them and saying that no more of them are being placed abroad, except in the most special circumstances and with the individual authority of the Minister and the matter being referred to him.

We are doing everything possible to bring forward the placing of contracts for military and Civil Defence purposes. The Home Secretary, the Minister of Defence and the Minister of Supply are seeing what more can be done in this direction, but I want to repeat that however this matter is phased there must be some limit to the impact it can make on a situation of the size which confronts us.

I have given some account of the actions which have been taken and some account of the problems which remain to be faced. I have no wish to underestimate these problems nor, I think, have I sought to do so in the speech I have been making, but I think it would be a pity if we in this House or those in the industries concerned became too despondent.

Our worst danger, perhaps, is that we might abandon or relax the great efforts that have been made to build up efficiency, to bring in new machines and new methods, and to invent new fabrics. Both sides of industry have co-operated in trying to improve the efficiency of the textile industries and I pay tribute to them. Much more still needs to be done, but these troubles should not be a signal to slacken in our efforts or abandon experiments, either on the technical side, in double-shift working, or in anything of that kind.

We have to deal with a buyers' market and keen competition. Manufacturers, in those circumstances, have to quote competitive prices if they are to regain old markets, let alone if they are to win new markets. Solutions to all the problems are not within our grasp and I agree with the hon. Member that they are not perhaps within the grasp of any Government. Let us at least tackle those that are. These events, while they present us with great problems and considerable anxiety, should also present us with a challenge and it must be the task both of Government and industry to accept it.

4.46 p.m.

I am glad of the opportunity to draw attention to the present serious situation in the Lancashire cotton towns. While I am aware that this debate is concerned with textiles generally, I can only speak, of course, of the cotton industry. I can speak most definitely for that part of Lancashire which we know as the weaving area—North-East Lancashire, the part that stretches from Blackburn right across to Nelson and Colne—the Burnley area, and by the Burnley area I mean the Burnley Exchange area which covers Nelson and Colne and a number of smaller places.

In that area are towns which are literally cotton towns. They have, as the President of the Board of Trade said, only one industry—places like Great Harwood, where 80 per cent. of the insured population work in the few cotton mills which are in that town. The rest of the insured population is made up of postmen, policemen, school teachers and people like that. When the cotton industry is hit in those towns, it means that the whole town practically dies.

That situation is prevalent in a very large part of North-East Lancashire, which is the Burnley area. I know from conversations which I have had previously with the President of the Board of Trade that there is no great need to press upon him, or upon the Government, the seriousness of the situation, but I should like to tell him of the alarm and despondency which is felt in that area by the sudden turn of events that seems to have overwhelmed the population.

The right hon. Gentleman spoke about 5 per cent. of unemployment. I am afraid he is seriously under-estimating the situation. There is a great deal more than 5 per cent. unemployment in Burnley, at all events. When we talk of unemployment, as the President of the Board of Trade said, we do not really begin to touch the problem because, apart from those who are temporarily stopped, there are thousands of people working full-time but getting half wages. The problem there is not one of temporary or of permanent unemployment; it is one of permanent full-time working with people underemployed, and, therefore, drawing only half wages. But the Minister will know—

Are the people of whom the hon. Member is speaking paid on piece-work rates, or are they day or hourly workers? How can they be working full-time and earning only half wages? Are they pieceworkers?

That shows how little knowledge of Lancashire has penetrated into outside districts. Under-employment in Lancashire is known perfectly well. A weaver ordinarily works six looms; she is paid piece-work rates. When she has only three looms to look after, she turns only half the product, but she has to be there the whole time. These people may well—indeed, in previous times, many of them did—earn less for full-time work than they could have got at the employment exchange.

The President of the Board of Trade will be aware, from the deputations he has already met, of the seriousness that is felt in the area. He will know that immediately the decision was known about the Australian embargo, the Manchester Chamber of Commerce telegraphed him and, I believe, sent a deputation. He will know, too, that they sent him a telegram asking him not to put into operation the D scheme. I do not want to go into that, however, because I agree that it would be wrong to confuse the serious issue of Lancashire's present position with the Utility scheme, although it has some bearing on part of the problem.

The President of the Board of Trade will know that the Council of the Textile Factory Workers' Association is so concerned about the position that they are sending a deputation to meet Lancashire M.P.s. I ought to tell the right hon. Gentleman that in the North-East Lancashire area, about which I am speaking, all the local authorities have been so much concerned that they have met the regional officers of the Board of Trade, the Ministry of Labour and the Ministry of Supply. They have also met—I hope that the President will take note of this—the Cotton Board, but have got very little satisfaction from it. I hope that when he meets Sir Raymond Street, the right hon. Gentleman will ask him to take a little more helpful attitude towards the problem of diversification in industry than he has shown up to the present.

What has happened is that in a very short time the area has been overwhelmed with large-scale unemployment. I remember what Lancashire was like in the old days before the war, and in the House I fought for diversification of industry there. I was once successful in the Ballot and asked Sir Kingsley Wood, who was then President of the Board of Trade, to appoint a committee to go into the problem. As a result, the problem was investigated and we had the Barlow Report, but unfortunately war came, industry expanded in Lancashire, and we did not become a Development Area. In consequence, we are now slipping back to the position of many years ago. Every Lancashire cotton town in the weaving area is now concerned very much with the same problem.

While I was waiting to be called, I received a green card asking me to see one of the Lancashire textile leaders who is very well known to many in the House. I asked him what was the latest position in Burnley. He tells me—and this disproves the point that the President of the Board of Trade was making—that two or three mills are closed down until Easter and that 16 other mills are closed down this week. The number of unemployed in Burnley is about 2,560. That is a very serious position. It is a good deal more than 5 per cent.

What does this unemployment mean to a town like Burnley, where until October of last year the weavers were earning £7 or £8 a week but now come down to half wages—for some of them, £3 or £4 a week—and with others down to 26s. a week? It means that every shopkeeper will lose £s per week. It means that in Burnley alone the shopkeepers will be missing about £10,000 or £12,000 worth of trade a week.

It does not mean only that the cotton trade is hit. When unemployment is brought into the weaving sheds, it means also unemployment in the spinning factories, in the engineering shops, the mills, the machine shops, the warehouses, the bleach works, the die works and the finishing works. It runs right throughout the whole of the area, and to Lancashire a stoppage in the cotton trade is one of the really dreadful things.

I received only two days ago a letter from a lady—a stranger—who has been in Burnley, and I should like to read a few remarks about her impressions of Burnley as she saw it last week as compared with what she knew some time ago. She says:
"The impression I got was that after so long a spell of full employment, the present turn of events has hit them very hard. They seem bewildered and greatly distressed. I am certain that anything you can say down there"—
that is, in the House—
"will help them considerably in their present unhappy state."
That period of security has gone, and what Lancashire is afraid of is that we shall slip back again to the old days as-we knew them before the war.

Would my hon. Friend allow me to say this? Due to the method of short-time working in the cotton industry, those who are on short-time can be worse off than those who are totally unemployed, because they are not eligible for unemployment benefit.

That is perfectly true. Furthermore, a lot of married women do not go to the employment exchange to register as unemployed. It is difficult to convey to people outside Lancashire, who see only the employment exchange figures, an adequate picture of the distress which is rampant there.

Will the hon. Member allow me to clear up this point? What he describes is not the situation in Bolton. The tendency this time in Bolton has been to work one day less a week—to work four days or, at the worst, even three days—and on the days when people are working they are largely on full-time. His accurate description of what happened before the war does not apply in Bolton now.

Bolton is not so much a weaving area. It is a spinning area. They do things a little better, perhaps, in Bolton to get the maximum from the Government. In Burnley we are honest about the thing, and we are suffering.

Last week I asked the Minister of Labour the present number of vacancies for cotton operatives in Burnley as compared with October of last year. This shows the suddenness of the change. In October, the employers were looking for employees—there were 400 vacancies. On 15th February, there were only 27, and these, probably, now have been filled. Instead of employers looking for 400 people, as they did in October, 2,500 operatives are now looking for work.

The Minister of Labour, in reply to a supplementary question, assured me that it was not the intention of the Government to keep a pool of labour in the cotton industry for drafting elsewhere. But whether it is the intention or not, the unfortunate part about it is that there is a very large pool of labour there at the present time, and we want something done to absorb that pool. We would prefer that it was absorbed in the cotton trade.

I do not share the pessimism of many people about the cotton trade. I believe we can go a good way towards restoring its prosperity. After all is said and done, it has been through difficult times before and we did recover the situation. The difficulty now is that there has been a change. We did achieve more confidence in Lancashire, but now a situation has arisen, and the change has so alarmed the people that they are feeling very depressed.

The Government may be able to tell us about something they can do to reassure people in that area. In June, 1951, in the whole of Burnley area there were only 89 male workers registered as unemployed. Of those 89, 48 were disabled people, and half of them were over 56. In fact, we had a situation in Lancashire, at least in the weaving area round Burnley, of complete confidence in the future up to September and October of last year. It has been said that the change was taking place before September and October. I do not know. I only know this, that right up to the Election we had vacancies and no unemployment. Now we have no vacancies and lots of unemployment.

If the hon. Gentleman wants any proof he has only to visit Macclesfield where we had 60 unemployed last year, and the figure in October had gone up to the 700 mark.

I do not know anything about the Macclesfield area. I am talking about the weaving area in Lancashire and the problem facing the Government at the present time.

It is said that we ought not to have sent orders abroad. But every loom was fully occupied. There were warps in every room and every spindle was working, and there was no point in keeping those orders here. Now the situation has completely changed, and I was glad to hear the President of the Board of Trade say that he proposed to issue no more licences with regard to Japanese grey cloth. It may be there are differences in the cotton trade with regard to the finishing of grey cloth, but I cannot see why, if grey cloth is brought to this country to be finished in order to keep the finishers at work, they cannot be equally kept at work if the cloth is manufactured in this country. That is one of the problems which will have to be tackled.

I am of opinion that the Government would do a great deal for the cotton trade in this country in every way if they would say that there will be no more Japanese cloth coming into this country, but that the cloth which goes out for export will be stamped that it has been spun, woven and finished in Britain because we lose a great many markets owing to stuff coming into this country and being finished here and going into our markets presumably as British cloth. That might help considerably.

So far as the Australian quota is concerned, we lost there 123,000 square yards. The Minister says that 10 per cent. is all that the contracts will give us. But if it gave us 10 per cent., the Lancashire cotton trade having lost 20 per cent. in Australia, it would put back half the Australian trade. When we lose 123,000 square yards it means we have lost the work of 10,000 looms and, at four looms to an operator, we have lost the work of 2,500 operatives. So at least, by looking at the problem of contracts, part of the damage which has been done by losing the Australian trade could be put right again straight away. I hope that that problem will be considered very seriously.

May I ask the Government to have a look at the problem of Utility from this point of view? It is having some bearing on the trade of this country. We do not want to go back again to shoddy goods. The week-end before last I went into a shop and asked the price of a certain garment. I was told it was 26s. They said, "If you buy today it is 26s., but if you leave it till next week it will be 27s., because it will go outside the Utility range." I went into a tailor and asked the price of a suit. I was told that it was 30 guineas but that if I left it till next week, it being a good suit, it would come down to 27 guineas. So hon. Members will see that the people who can still afford the best will get the best. It would be a good thing if the Minister would consider, with the Chancellor of the Exchequer, the question of wiping out the Purchase Tax on all textiles at the present time.

I would ask the Minister, when he gives out the contracts, to give them straight to the mills and not to work through agents. It would be very much better for Lancashire if they went straight to the manufacturers instead of going to a man who has a little office in Manchester with a table and a chair in it. Last week I heard of a mill which was making sheeting and which is closed down until after Easter. I heard of an agent who placed an order for sheeting with a firm which had never done sheeting before, while the mill which could have done the job is out of a contract. I ask the Minister to consider that problem.

Returning to the question of diversification, in the old days people wandered away from Lancashire because there was no trade. Whole families went, and when the family went the women who could staff the mills went too. I know the Cotton Board and the cotton employers are afraid of diversification, because they say that if other industries are brought in, the people will be taken into those industries and there will be no one left for cotton.

I believe they are wrong. They have been proved to be wrong in the case of Chorley and Clayton. If we get other industries there we shall get the families, and what Lancashire needs is some industry for male labour so that the males will not go away and take the females with them as they did in the old days. I suggest that the Minister has a serious talk with Sir Raymond Street and tells him he ought not to be as afraid of diversification as apparently he is.

I ask the President to look at the question of contracts, of Japanese competition, of diversification and the Purchase Tax as well. If he will give serious consideration to those matters, I think he can bring back to Lancashire the confidence that we built up to October of last year.

5.9 p.m.

Before the conclusion of this debate many expressions of opinion will have been voiced about the causes of the depression which has overtaken the cotton trade of this country. There is no doubt that many of those opinions will be completely at variance one with the other. But however much we may differ on the question of causes, there is at least one thing upon which I feel hon. Members on both sides of the House can agree; and that is that we all share a common anxiety about the increased unemployment which has occurred as a result of the persistence of this depression.

In examining the problem, the first thing upon which we should be clear is that this depression is not peculiar to this country. It is world-wide in extent and a similar anxiety is being expressed in other countries as well. Therefore, we should look outside rather than inside this country for the causes of this depression.

As the hon. Member for Rossendale (Mr. Anthony Greenwood) pointed out, in Belgium and in other European countries, short-time working is now the order of the day. France has banned any further importation of Japanese cloth. Many firms in France are working fewer than 30 hours a week. In the United States of America a very limited off-take is reported.

It may be of interest to hon. Members that whereas last year American cotton spinners consumed more than 10,500,000 bales of cotton, it is expected that this year they will consume fewer than nine million bales. That shows at once that there is a total loss of production, over the whole of the United States, of more than 15 per cent.

Even in Japan troubles are so great that the Japanese Government have decided to force on the industry a reduction in production of something like 40 per cent. Although this question of recession, or slump, is being argued in many quarters at present, there are people not unfamiliar with the textile scene who are firmly of opinion that the recession in Lancashire need only be a temporary recession.

They hold the view that this recession is the direct result of choking up of the pipeline which has become over-stocked with goods largely as a result of the panic buying which took place because of the war in Korea. There is no doubt that until that pipeline begins to clear itself in some way a resumption of buying must, of necessity, be on a restricted scale.

Another important factor is the "bearish" sentiment which exists about the future trend of raw cotton prices. In the case of Egyptian cotton, the general belief is that the Alexandria market is on a completely false basis and that, in spite of the efforts which are being made by cotton interests in Egypt to bolster up an artificial price, Egyptian cotton will have to suffer a considerable reduction in price if it is to attain parity with world values for other cotton.

When we remember that about one-half of our total number of spindles are engaged upon the spinning of Egyptian or Egyptian type cotton, it is easy to understand the extent to which the uncertainty about cotton prices affects the trade of Lancashire.

In the other parts of the industry where American or American type cotton provides the raw material, there, again, there is a feeling that the prices for the raw material are too high, though not for the same reasons as those which obtain in respect of Egyptian cotton. Lancashire spinners have been complaining for a long time that the price charged for American cotton by the Raw Cotton Commission is higher than the world value.

This places Lancashire spinners and manufacturers—the whole of the trade—at a grave disadvantage with foreign competitors who can buy the same type and quality of cotton at a price lower than that which the Raw Cotton Commission charges Lancashire spinners.

The reason for that is the dollar shortage. Because of the stringency in the supply of dollars the Raw Cotton Commission has had to search the markets of the world for non-dollar cotton which may be used as a substitute for the more popular American cotton. The demand which has thus been engendered by buying those cottons has forced up the price of non-dollar cotton to such an extent that the average price for the whole of the cotton bought by the Commission is higher than world prices.

A short time ago the price charged to British spinners by the Raw Cotton Commission for American cotton was as much as 6d. a lb. higher than the world price. But today, because of the lack of demand caused by the depression, the price of those outside growths has receded until the average price of cotton now quoted by the Commission is only 1d. a lb. higher than the world price.

But even that is too much. It is quite enough in the present position, when there is such a scarcity of business, to push what business there is into the hands of our foreign competitors. Indeed, any price higher than the world price is too much if Lancashire is to hold its own in the fight for world trade.

When buying is resumed exactly the same conditions will prevail once more unless dollars can be made available with which to buy the American cotton which Lancashire needs. I suggest that this is one way in which the Chancellor of the Exchequer can help, by ensuring that the endeavours of the cotton industry are not hampered in future by an insufficiency of dollars with which to finance her raw material needs.

In an effort to beat the depression, both spinners and manufacturers in Lancashire have already taken their medicine and have already reduced their prices to the absolute minimum. The operatives, for their part, have also taken a knock by the short time which they have worked and which, much to their credit, they have accepted without embarrassing in any way the efforts of the industry to deal with the situation.

For a long time Lancashire has been Egypt's best customer for Egyptian cotton. It is now up to the cotton interest in Egypt to decide how much of the knock they are prepared to take and how far they are prepared to reduce their prices to bring them in keeping with world parities and thus restore the confidence in raw cotton prices which is needed.

Also, we must not forget how the cotton trade is affected by the balance of payments crisis. That the crisis extends far beyond the shores of this island and that there is no easy and comfortable way of dealing with it has been brought to our minds in no uncertain manner recently by the action which has been taken in other parts of the Commonwealth. The sudden decision of the Australian Government to bring their imports to a virtual standstill was a forceful reminder of the widespread nature of this crisis.

Though no one can dispute the right of Governments to deal with their own problems in their own way, there is no denying that this decision by the Australian Government was a grievous blow at Lancashire's textile trade. Though consignments which are actually in transit are to be admitted into Australia, they will have to be counted against future quotas.

But that does not alter the fact that there are still large orders which have been placed, which are not yet completed and for which the raw material has been secured. The manufactured goods made from these materials will finish up in the warehouses and the cellars on this side of the world unless something is done to find some outlet for them, and I can assure hon. Members on both sides of the House that that is much easier said than done. It is actions of this kind by Governments which make the cotton industry, dependent as it is for its welfare upon a healthy export trade, particularly vulnerable, and, if this sort of thing is to be allowed to develop, then efforts to stimulate and expand the export trade will be rendered meaningless.

My hon. Friend the Member for Bury and Radcliffe (Mr. W. Fletcher), who is just coming into the Chamber, has put forward on many occasions a point which is troubling all sections of the cotton industry at the present time, and particularly the exporting section of the industry. It is the apparent disregard which is being shown by Governments for the sanctity of contracts. The recognition and carrying out of contracts is virtually the corner stone upon which all trade is built, and the moment Governments or individuals cease to recognise that salient truth it will be the end of all honourable trading between Governments and individuals alike.

In what way can the Government help in this crisis? Lancashire does not expect the Government to place defence orders merely for the purpose of stimulating trade. Nevertheless, I was glad to hear from the President of the Board of Trade the assurance that there will be no undue hold-up in the placing of these defence orders, and I hope that instructions will be given to the responsible Government Departments that a fair share of these orders will be given to the textile industry by placing as many orders as possible with the Lancashire mills at the earliest possible moment.

Now, may I say a word or two which I hope will be heard in the Colonial Office? During the past few years, when the sellers' market prevailed and Lancashire's order books were full and long-dated, the Colonial Office was anxious to ensure that the populations of the Colonies were not kept short of essential supplies of cotton goods, so they arranged for extensive importations of cotton goods from Japan. In the Lancashire cotton trade today, there is a considerable fear that the Colonial Office in London and the various authorities in the Colonies are not fully aware of the change which has taken place in Lancashire during the past few months, and that they do not realise that all the facilities are available in Lancashire to supply any amount of cotton goods to the Colonies which they may require.

Reports have been received in Manchester giving the impression that further orders are liable to be placed with Japan, unless some action is taken to prevent it. It would certainly give great satisfaction indeed if the Government would tell Lancashire quite plainly that steps are being taken to limit the import of Japanese cotton goods into the Colonies and to direct as much of that trade as possible to Lancashire.

Finally, I should like to stress this point. It must not be assumed by anyone that Lancashire has lost heart. Today, the cotton industry of Lancashire is far stronger, from the point of view of technical efficiency and organisation, than ever before in its history and, being aware of this, it is facing the situation, which is a difficult one, with realism and determination. All that it asks from the Government is that the Government, in their turn, shall also play their part in the way which Governments can do, and that the Government will deal with this problem in the same spirit and temper, and with no less realism and determination, than that which is being shown by the industry itself.

5.26 p.m.

I have been very interested, in listening to the speech of the President of the Board of Trade and of the hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield), to find that they have discovered the world crisis. There has been some difference of opinion among hon. Gentlemen opposite in the last few months as to the exact cause and nature of our economic difficulties, but of one thing I am quite sure. It is that the longer this Government continue in office, the more will the world crisis have a role in their speeches.

I think we all remember enjoying from the President of the Board of Trade, in his previous incarnation on this side of the House, speeches which delighted us, in which he made great game of the economic difficulties of the Labour Government. The right hon. Gentleman had not then discovered the world and the influence which it exerts on our affairs, and we are glad to see that office has educated him so rapidly.

The speech of the right hon. Gentleman was very moderate in tone and very conciliatory, but I am afraid that it was extremely disappointing in content, and it certainly did not measure up to the spirited challenge which was given in the able speech of my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood). When the right hon. Gentleman, at the beginning of his speech, embarked on a long historical treatise, my heart sank, because I know that, whenever a Minister starts a speech with a historical treatise, we can be sure that it will not end up with a blue print for action, and that is what has happened this afternoon.

We have been left with a very vague and indecisive impression by the right hon. Gentleman, and it really will not do, because this situation is one which is striking at the roots of the economic and psychological security of a very important area of this country. It has been said that we must not get the position out of focus, that we must not overemphasise the difficulties or alternatively under-estimate them, and I certainly agree that we must keep a balanced view of what is happening and of what we must do to meet the situation, but it would be a fair statement to say that, first and foremost, unemployment in Lancashire is still rising and that nobody in any responsible position in Lancashire today is prepared to say that he can see a trend for the better.

The second point is that the rate of unemployment in Lancashire is running at something like three or four times the national rate. In that situation, anyone who represents a Lancashire constituency in this House is entitled to something more encouraging, more positive and more decisive than we have had from the right hon. Gentleman this afternoon.

I hoped that, when he began his comprehensive survey, we should be given some impression of how the Government size up the situation and where they think Lancashire is going, because Lancashire is asking that question. It is undoubtedly true that what is threatening Lancashire is nothing less than a slump. Lancashire is asking two things. First, is this a temporary situation, or is it the beginning of a new and enduring depression? Secondly, is this accidental or is it, to some extent, deliberately created by Government policy? [HON. MEMBERS: "Oh!"] Just a moment. I think hon. Members opposite ought to be a little more thoughtful before they start saying "Oh!" It demonstrates the frivolity of their approach to this problem.

When we consider that we are embarked upon a re-armament drive, it is obvious that the Government are trying to run down some industries. It would be quite wrong to inject a big re-armament programme into our economy and not to run down some industries. Is it, therefore, a partisan point to ask the Government whether, in the economic pattern it is evolving, Lancashire is expected to contribute some manpower? I think we have the right to ask the Government whether it is part of their policy to help man up the re-armament drive by running down the cotton industry.

I understood the hon. Lady to say that the Government had deliberately brought about this state of unemployment for a political purpose of their own. She is now saying that if the Government had of necessity to move some labour, that was another matter. Will she say exactly what she means?

If the minds of hon. Members opposite were not so clouded with partisanship they would understand what I meant. I never mentioned political purposes. I merely asked whether this recession in cotton was deliberate or accidental, and, if it was deliberate, whether it was part of the economic plan for the re-armament drive.

The hon. Lady's question presupposes that she believes it is in the power of any Government in this country to bring about a big recession in cotton. The whole tenor of the two Front Bench speeches this afternoon was that it was not within the power of this country to do that. Therefore, it seems that her argument is on an entirely false basis.

I think that is a very peculiar argument. If it is not in the power of any Government to reduce consumption in certain industries, then no Government can ever organise a rearmament programme or a defence against inflation. Surely, the whole financial and budgetary policy of the Government is to do just that, to divert demand from certain industries in order to free manpower for the manning up of the re-armament programme. I must say I think that is a remarkable intervention by the hon. Gentleman who I always thought had a high level of intelligence.

Is my hon. Friend aware that Mr. Lewis Wright, the President of the Lancashire Weavers, and a most responsible man, made similar statements in Manchester last Saturday afternoon?

I am glad to be reinforced from such an excellent source, and I go forward encouraged to resist the interventions of hon. Members opposite.

I return to my point, because Lancashire is asking these questions. This problem has been steadily accumulating since November, and it shows signs of getting worse, not better. How long do the Government intend to wait before getting down to fundamental answers to fundamental questions? We have had nothing fundamental from the President of the Board of Trade today.

I am delighted to see that I am getting under the hon. Gentleman's skin.

I ask the Government for a reply today. Lancashire will certainly not consider that this debate has gone anywhere near the root of the matter unless replies to these questions are given. Is it the intention of the Government deliberately to divert cotton workers to armaments in the Lancashire area? That is the first point. The second point is that if it is their intention, where is the work to which these workers are to be deliberately diverted? Where are the contracts, the factories and the raw materials for them?

If there is no such intention, then may we have some estimate from the Government of what they visualise as the role of the cotton industry in the light of our current economic position? Is that too much to ask? Is it too much to ask the Government to let us have a clear picture of whether they believe that this industry, which has been so buffeted and bruised by world events and is now beginning to be knocked about again, is undergoing a new phase or not?

We have heard a good deal this afternoon from all sides about what is happening to our export markets; how this one has gone and how that one will not be regained, and so on. I suggest that this is a job the Government ought to do. Instead of being left to make our own estimates of trade trends in an amateur way, we ought to have a White Paper on the whole matter telling us what is happening in the international trade field and what the Government think ought to be the size of the cotton industry today, and what manpower should be employed in it.

May I ask the hon. Lady how she thinks anyone, either on the Government Front Bench or on the Opposition Front Bench, can possibly forecast what the future of the cotton trade is going to be? That is a question which can only be answered by the people in Lancashire and other areas who are in daily contact with the markets of the world.

I have a very simple answer to that one. Clearly, the picture must be drawn with the aid of the men on the spot, but the job of co-ordinating the information and of putting the matter into its proper perspective is the job of the Government. Therefore, I ask the Government to say, if there is to be no deliberate diversion of these workers to re-armament, what they think is the level of consumption that will have to be met and what manpower will be required to meet it.

Finally, all the talk this afternoon has been of a reduction in markets, and so on. If the cotton industry has got to settle down to a lower level of production, then where is the plan for the alternative industries which will keep Lancashire employed? If there is one thing about which Members representing Lancashire constituencies are convinced it is that Lancashire will not tolerate another period of stagnation and decay. It is determined that this time there shall be no drift, but effective action. After all, the Government have now had nearly six months in office.

The hon. Gentleman was very effectively answered by the hon. and gallant Member for Rochdale, who said that the cotton industry today faces this new crisis better equipped technically, and with greater organisational efficiency, than it has ever had in its history. That is due to the fact that in the last six years we had a Government which had a policy for the cotton industry and which did something about cotton.

Had the Labour Government been in office now we should not have had the rather vague speech which we had from the President of the Board of Trade today, but a plan of action in order that we might keep our promise that never again should Lancashire be cursed and darkened by the shadow which fell upon it in the inter-war years. We have a right to expect something more positive at this stage.

It is not as if, when the right hon. Gentleman took office, this was a virgin field. The cotton industry has been more examined and reported upon and analysed and statisticised than any other industry in this country. Some of that work was done, and very rightly and very effectively done, by my former right hon. and learned Friend Sir Stafford Cripps when he was President of the Board of Trade. I know something about it because I had the privilege of being his Parliamentary Private Secretary at that time.

I know that his first interest and anxiety on taking office was to make sure that in the post-war period Lancashire should enter upon a new period of stability and prosperity; and up to now it has had such a period. But it is quite wrong for the right hon. Gentleman the President of the Board of Trade to suggest that it was because the industry "flung itself" into an exploitation of post-war possibilities. It had to be pushed; and it was pushed very effectively by the Labour Government. It was done by a series of co-ordinated plans by Sir Stafford Cripps.

As early as October, 1945, he set up the Cotton Working Party to gather together evidence already available—piled up during the war by such bodies as the Cotton Board post-war committee and other important committees which had been examining these problems. As soon as he had their report he did not brood upon it like a hen for six months. It was only a short while before he had made up his mind and was offering the industry a spinning subsidy scheme.

We estimated the post-war prospects in Lancashire and worked very successfully to a plan. It was based on two primary assumptions. The first was that we could take it for granted that we should find after the war a continuation of the pre-war trends in international trade. That is to say there would be a world expansion of the consumption of cotton goods but a reduction in the world trade in cotton goods because, of course, other countries would be developing their own industries and new rivals would be appearing.

Therefore, at that time we never expected that the export position for cotton when the war ended would be likely to be an easy one. Nobody in Lancashire has ever assumed that. But the second assumption upon which we worked was that we could expect that Lancashire could stabilise itself in meeting a home consumption of something like 5 per cent. over the pre-war level—that increase being due to the fact that we were to have full employment and a fairer re-distribution of income and, therefore, a more stable and sustained home demand.

How has that post-war plan worked, and what has suddenly gone wrong? Unless the Government really go about the task in same way as Sir Stafford Cripps did we may be asking for the wrong answers because we have not analysed the problem properly. I have been trying to do a little of my own amateur research into the problem because the Government have not been doing it for me.

It is very interesting to see in the Cotton Working Party's report a table giving the Cotton Board's estimates of postwar trade, based upon certain assumptions which I have mentioned and which were certainly not over optimistic assumptions. Nobody who helped to compile those cotton reports—and they were all men from the industry—was feeling optimistic. Therefore, they were assuming adverse developments in our export trade and no excessive expansion in our home trade.

But if one studies those figures it is very interesting to find that their estimate of our export figure was at just about the level at which it was in fact running in 1951. The Cotton Board estimate was that, even on the least optimistic assumptions, exports of piece goods would be running after the war at about 750 million square yards a year. As far as I can make out, the actual yardage at the moment is 1,083 million; and as that includes about 260 million yards of Japanese grey cloth, it works out at just about the figure they estimated.

The hon. Lady is quoting figures for 1951. I want to be quite fair, but surely she agrees—and it has been admitted on all sides of the House—that in the 12 months after the commencement of the war in Korea practically every country, fearing a fresh world conflagration, stocked up and that is why the pipeline is full now. So 1951 is not really a fair example of what production would normally have been.

Obviously I am quoting 1951 because these are the latest figures available. I agree it was a year when some of those influences were being felt. I am only giving the picture for what it is worth up to the end of last year and saying that the estimate on the export side just about works out right. But the interesting thing is that the estimated consumption on the home market, which the Cotton Board table gives as 2,300 million square yards, has not been reached. I believe the consumption on the home market has been running at something like 1,500 million square yards.

Therefore, up to the end of last year, the deficit has not been on the export side. It has not been in that respect that we have been falling down. On the other hand, we have not yet reached the home consumption figure to meet which the post-war development of Lancashire industry was planned. That is very relevant to our consideration, because whereas it is quite true there is now a new threat to our export trade, and that probably the figure at the end of 1952 will not be as high and the estimate will not be reached in the current year, we are still left with the fact that we have to set off against that a situation in which the home consumption, on which Lancashire might have planned to depend, is not being reached. And in such a situation it would be crazy to do anything which would reduce our home consumption of goods.

Therefore, I suggest that in attempting to meet this situation the Government must have a two-fold plan. They must have a plan on the export side and a plan on the home market side. I think we should agree on one thing—that our immediate difficulties with exports would appear to spring not so much from that natural expansion of industries in other countries as from the new wave of artificial restriction of trade which has followed the Korean war and the world-wide effects of the re-armament programme. It is quite true that the natural expansion of home industries in other countries is there; but to some extent it had been allowed for in the post-war plan, and it had not, up to the end of the last war, prevented us from reaching the post-war export estimate.

What does hit us now is this new wave of import restrictions which we played our part in setting going, and which is now circling round the world in a downward spiral and threatening to plunge us all into a world-wide recession of trade. We are suffering now from the interaction of each country's balance of payments difficulties upon the others.

Clearly, in that situation, there is a field in which Government action could be effective without restricting the normal rights of expansion of other countries. If we are all going to settle our problems internationally by dropping world trade to a lower level than it need be, we are not dealing with natural causes but with very man-made causes of the economic difficulties from which we suffer.

Taking the case of Australia, which has been quoted so often, I think that we have a very legitimate cause for saying that the actions of the Australian Government have been planned, not of course with malice, but with short-sightedness amounting almost to stupidity. Even assuming for a moment that Australia could not solve her problem merely by cutting out non-sterling goods—because she says that so large a part of her imports have been sterling imports she could not have balanced her trade without some cuts in sterling goods—there is ground for saying that the selection of the items she has cut is the height of folly when one considers the question in terms of the Commonwealth family as a whole and the needs of that family.

I was interested to read, in the "Observer" of 9th March, the following:
"Details of Australia's emergency import licencing, … were disclosed by the Minister for Customs, Mr. O'Sullivan. They show that British exporters of machinery and capital equipment, already hard put to it to meet delivery dates, are likely to be least affected, whilst exporters in industries already having difficulty in selling goods abroad will face the most critical time since the 'thirties."
The outstanding example of the second category is, of course, the textile industry. In other words, we have Australia meeting her sterling problem by cutting our textile imports and trying to enter into the queue for capital goods that we can sell in any part of the world. I think that the fact that that problem was not discussed at the Commonwealth Conference shows that nothing worth-while could have been discussed. What else was there to discuss, if we did not discuss the simple problem that Britain faces—the fact that we can sell our capital goods but we cannot sell our textiles? "O.K." says Australia, "we will cut out your textiles and buy your capital goods."

If our Commonwealth family is not to have a common Commonwealth plan, I think we should do what has had to be done more than once in the last six years —enter into bilateral arrangements of conditional sale and say "All right, if you want any capital equipment you have to take so many textiles as well." That is what we had to do in our various bilateral European trade treaties and it is up to the Commonwealth members themselves to decide whether they are going to settle these things in an amicable way or whether they are to be settled in the harsh way—

I have here a statement issued from Australia House in regard to the restrictions placed on imports from the United Kingdom. It clearly draws a line of demarcation between consumer goods and capital equipment, as the hon. Lady says; but to get the matter in its correct perspective, it does definitely say that capital goods will be subject to quota treatment by administrative control. It is a different form of restriction, but it is a restriction on capital goods.

I agree. I was not denying that. They are both subject to import licensing. But the details, according to the "Observer", show that those least affected by the import restrictions will be the capital goods exporters. The effect of the restrictions imposed depends entirely on the size of the quota, and it seems to me to be quite clear from that report that the quotas for capital goods will be very much more generous than those for textiles, although our capital goods are the goods we have the least difficulty in selling anywhere.

The second artificial restriction in the world today to which I should like to draw the attention of the House is one that is really quite crazy when one considers the extent to which we face a dollar problem in the sterling area—and that is the tariff position in the United States. I think it is high time that the British Government took a rather stronger line on this question. I read with great interest a report of a Commerce Mission sent to Europe by E.C.A. in 1949 to study this problem of the dollar gap, and what Britain and America could do about it. I recommend the Minister to read the report, because it shows quite clearly, having gone through all the factors in the situation, that
"Expanded sales in the United States of products from the participating countries,"—
that is E.R.P. countries—
"their dependencies, and other areas stand out, in spite of their many difficulties, as the main solution of the dollar gap problem."
It goes on:
"In summary, a weighing of alternative courses of action leads to the conclusion that the present critical lack of balance in world trade should be corrected"—
and, in their italics—
"primarily by stimulating an expansion of exports of goods and services from other countries to the United States."
That was a report in 1949.

In another section it points out that the exports to the United States of the countries most needing dollars have been diminishing and not expanding. Those exports, in 1937, for instance, were 2 per cent. of the gross national production of the United States, whereas by 1948 they had fallen to 1.2 per cent. and one of the reasons, the Mission frankly admits, is the system of tariff barriers deliberately put up by the United States of America against the entry of our goods; and anybody in textiles knows how high some of those barriers are.

Does the hon. Lady realise that since that date the national income in the United States has increased by 25 per cent.; her imports by 50 per cent. and, since 1948, she has reduced her tariffs by 28.3 per cent.?

I do not think anybody would say that the tariff problem does not remain. We know it does. I think it is of relevance. I am quoting from a report prepared by American businessmen.

I dare say; but we have not had the dramatic response to the situation which is clearly outlined not by the American State Department or politicians but by the businessmen, based on the economics of the dollar gap.

Is it not also true that it is precisely since that date that there has been a falling off in textile exports from this country to the United States of America?

That is so. I think the House agrees that it is a ridiculous anomaly that, while we are struggling to dispose of our goods and to earn dollars, we should be faced with these barriers.

The third artificial barrier which remains to bedevil our position and to make our problem more severe is that increasingly artificial barrier between the East and the West in the development of our trade.

It is ridiculous that we have a situation in which Britain has a strategic stockpile of timber, of which a substantial element comes from the Soviet Union, and yet for strategic reasons we cannot go to the Soviet Union and say, "You want machine tools. Very well, you can have some machine tools provided that you take some British textiles." I should have thought in any case that it was extraordinarily difficult to decide the exact differentiation between a civilian and military use of a machine tool.

These strategic restrictions are further drying up the channels of world trade. So long as that process continues, only one thing faces us, and that is an increasing recession and a downward spiral of the standard of life of every country participating in it.

Finally I turn to the second side on which the Government ought to have a clear and decisive policy, the home market. It is crazy that at a moment when the textile trades are heading for a slump, at a moment when, as the figures I have quoted show, we have not reached the level of home consumption which we estimated for the post-war period, we should extend Purchase Tax to new sections of what was once Utility clothing. It may be perfectly true, as the right hon. Gentleman says, that when he went to Lancashire he was told by the Cotton Board and other bodies to get rid of the Utility scheme. But is he prepared to say that they are happy at the alternative which the Government have now put forward? Are they not now beginning to realise what will be the effect of deliberately sending up the price of clothing on the home market by the D scheme being at its present level?

When I blamed the right hon. Gentleman earlier, he was out of the Chamber at the time, so that is probably why he is still smiling. I may say that I thoroughly disposed of him in his absence: I said then that his lack of decisive action was unfair to Lancashire, and I will give him one example of a field in which he has had a good deal of time to make up his mind. It may be a small item, but all these items contribute.

I raised this matter with him during his speech on the Budget debate but he waved it aside as relatively unimportant. It was the question of the uplift in the valuation for the Purchase Tax of the manufacturer's selling price where he sells direct to the retailer. It may be that the right hon. Gentleman does not know much about the subject, but he has had representations from the retailers about it. The net effect of that little anomaly is that a higher level of Purchase Tax is levied on those items than would otherwise be necessary. It is a highly tecnical point with which I will not weary the House, but the President of the Board of Trade ought to know about it, and he ought to have dealt with it by now.

Finally, is it not clear that the whole of the financial and budgetary policy of the Government, which has been unfolded to us in a succession of revelations since last November, is deliberately designed to give us in general, and Lancashire in particular, the worst of all possible worlds? Here we have a consumer industry heading for a slump. As I have shown, that slump springs largely from the lack of effective demand in the home market. Yet at that moment what does the Government do? It gives us the classic formula for turning a threatened slump into a permanent depression. It gives the formula of raising prices on the one hand while, through the operations of the Bank rate and other financial mechanisms, cutting demand on the other.

What sort of a hope is held out to Lancashire when the Government raise the cost of food and other necessities by cutting subsidies, when the Government raise the cost of clothing by putting Purchase Tax on goods that did not bear it before, when the Government raise the cost of transport by increasing the petrol tax, when the spiral is going upwards and upwards on the price side, and demand is being cut by an increase in the Bank rate and restrictions on credit?

I am sure the hon. Lady would not deliberately mislead the House from her suggestion that it is the actions of the Government which have to some degree caused unemployment in the clothing industry. Hon. Members opposite took part with me in a deputation from the clothing industry only about a month after the Election to make complaints about unemployment in that industry. I am sure the hon. Lady would not like to give the impression that those conditions arose only since the Budget was framed.

He cannot have been in here when I was giving the background, because I gave a clear assessment of how the situation arose. It is equally true to say that the actions of the Government since they came into office have substantially aggravated the situation, and we are only at the edge of that aggravation. I want to say this to my Lancashire friends who put up a most sincere appeal for the diversification of industry to solve this problem: diversification of industry in the circumstances of the economic and financial policy of this Government is a complete mirage.

What industries can be brought in? What alternative consumer industries can be developed or, indeed, what other kind of industries? Already in Blackburn I know of an engineering firm whose livelihood has been cut to ribbons by a steel allocation which has brought it face to face with bankruptcy simply because it is serving a useful home purpose by making dairy machinery. Yet because it is not engaged 100 per cent. on export trade or 100 per cent. for defence, its steel allocation is giving it a headache which is already sending it reeling.

How can industry be diversified in that way? The policy which this Government have embarked upon is a deliberate policy of reducing the standard of life, and that is a policy of reducing consumption. [HON. MEMBERS: "No."] Certainly, because that is how the re-armament programme and the export drive are to be paid for—if they are ever to be paid for at all. In that situation how can industry be diversified? What industries can be introduced which will not be affected in the same way?

The right hon. Gentleman the Chancellor of the Exchequer is going to balance his Budget by cutting the capital investment programme. In that case how can industries be expanded? There has been a wonderful expansion of industry in Blackburn, during the last six years, as the right hon. Member for Blackburn, West (Mr. Assheton) knows. In that time there has been more industrial building, more diversification, than Blackburn has seen for over a generation, but that is to come to an end. Industrial building will be cut, capital investment will be cut. That is how the Chancellor is facing our economic difficulties, and I say that if that policy continues then Lancashire faces slow death.

I should warn the House that a great many hon. Members wish to speak. I hope all speeches will not be as long as those we have been experiencing.

6.10 p.m.

I have no specialised knowledge of the textile industry, and I would not follow the hon. Lady the Member for Blackburn, East (Mrs. Castle) in the intricacies of the argument she put forward, except to say that the whole tone of her speech was as unhelpful and as unrealistic as the tone of the speech of the hon. Gentleman the Member for Rossendale (Mr. Anthony Greenwood), who opened this debate, was both helpful and realistic.

I trespass shortly on the time of the House to put forward a suggestion which may help to provide some alleviation of the difficulties which the textile industry is going through at present. I do not pretend that what I have to say is in any way a long-term or far-reaching remedy. I leave such proposals to other hon. Members who have far greater knowledge of the textile industry than I.

The sellers' market has come to an end in the textile industry quicker than in any other industry; indeed, its end has come with great suddenness. In the six months ending February, 1951, the then Government found it necessary to place orders abroad to the extent of £6 million worth of textiles because the home industry was not able to fulfil the orders—for military clothing, and the like. This certainly showed a lack of foresight on the part of that Government, who could have held those orders and fed them to the industry as and when the industry was capable of dealing with them.

Does the hon. and gallant Gentleman realise that, in making that remark, he is in great peril of joining the group to which my hon. Friend the Member for Blackburn, East (Mrs. Castle), who has just spoken, belongs? Those orders were placed in pursuance of a re-armament programme held to be urgent, and the Government of the day could have adopted the suggestion of postponing the re-armament programme, which my hon. Friend wanted them to do.

That really is not so. If they had held on to the orders for clothing, it could not have been said that the whole of the re-armament programme was being held up. It was an error. It was an understandable and, perhaps, a not very serious error; but it was an error; and this Government is the heir to that error. I am glad to hear from the President of the Board of Trade an assurance that that mistake will not be repeated in the lifetime of this Government.

In February, 1951, the industry's order books were full. Six months later, in August, there were 13,000 unemployed. Today, there are 70,000. They represent some 5 per cent. of the total labour force, not including short-time workers.

The problem that we have to face of unemployment in the textile industry is different from that which we have to face in other industries. The greatest danger we have to guard against, where unemployment is concerned throughout industry as a whole, is a shortage of raw materials. In the textile industry that is not the case. Unemployment is being brought about by the jamming of the congested pipeline of stocks through lack of demand by buyers. It is towards a solution of this immediate, pressing problem of dwindling markets that I wish to make a suggestion.

May I point out that it is entirely wrong to say that in the textile industry it is not the case that a shortage of raw materials can create unemployment, because in the rayon industry, unless we get sulphur, the industry, being synthetic, is destroyed?

Is the hon. Gentleman opposite aware that Courtaulds closed a factory recently, and that British Celanese have, as well, because they have too much raw material at present? The trouble has nothing to do with a shortage of materials.

I did not say that it was impossible for the textile industry to suffer from a lack of raw materials. Of course, it is. What I am saying is that the problem with which we have to cope is not a shortage of raw materials at present, but the difficulty of finding markets.

The hon. Gentleman the Member for Rossendale asked the President of the Board of Trade in what markets the textile industry could expand. I go further and ask how the Government can help in finding markets which can take up some of the slack now existing in the industry? It is, obviously, a very limited field. The responsibility must rest with the industry. However, I believe that the Government can help, and, so far as it is possible, I am sure that the Government will help by placing defence orders—for uniforms, and the like.

It is here that I have a suggestion to make. There are 850,000 refugees in Palestine at present. A constituent of mine has recently returned to this country from Palestine where he was acting as a sort of welfare officer in the various refugee camps. The standard of life of those refugees it pitifully low. They have virtually no resources of their own, and they are entirely dependent for the bare necessities of life on charity provided by the United Nations Relief and Works Agency. They need clothing. Could we not provide it for them?

The United Nations General Assembly has recently approved a three-year programme of relief for those refugees costing £80 million, of which some £25 million is to be spent in the first year. Of the £25 million the United States Government have offered to contribute the dollar equivalent of £17 million, and our Government will contribute some £4 million. Could not some of this money be spent on providing clothing for those unfortunate people who are in such dire need of it? Could not the orders for this clothing be placed in Lancashire?

I would suggest to my right hon. Friend that he makes representations to the Foreign Secretary that, say, £2 million worth of clothing be ordered and paid for out of the United Nations fund. Divided among 850,000 people, £2 million is not a very large sum. It is something just over £2 per head per year on clothing. It could be paid for either out of this country's contribution to the United Nations fund, or, better still, it could be regarded as a purchase by the United States, and paid for out of their contribution to the fund, and we should then receive payment in dollars for the clothing.

I am not talking about our balance of payments. I am talking about the fund set up by the United Nations General Assembly, a portion of which is to provide clothing for those people, many of whom are almost stark naked.

My interjection was to ask whether it is not the case that that money was meant primarily to be spent on food, on which people are first of all dependent. The more money that is spent on clothing, the less money there will be to spend on food, and then somebody, somewhere, has to find extra money for food.

It was never intended that the £25 million was to go for food alone. Some of it is to go to clothing. I submit that £2 million could be spent on clothing those refugees in Palestine. I do not pretend that this suggestion is anything but a temporary arrangement, and it in no way attacks the root of the problem, but it could provide some degree of relief to the industry, and it has a considerable advantage inasmuch as, once this is agreed upon, orders could be placed immediately. I hope that this suggestion may be found to be of some use.

6.19 p.m.

I listened with interest to what the President of the Board of Trade had to say in reply to the very good speech of my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood). Before I begin what I originally wanted to say, I have one or two points to put which are relative to what the right hon. Gentleman said. With regard to price control, there was no reason whatever why any trader, retailer or wholesaler, could not have reduced prices even when price control was on. A maximum price was set, and to my mind the right hon. Gentleman's statement this afternoon was very misleading.

The D scheme, as it stands, is nothing but a tax-raising device. It has no other use. The old specification on which people could depend has gone. In my speech in the Budget debate, I agreed that some measure of flexibility had taken place, but nothing like as much as either the Douglas Report or the President of the Board of Trade made out at the time. There was a considerable amount of specified clothes being made. I will point out later why it is a misfortune that a lot of those specified clothes have disappeared; in a few months' time it may be necessary to be able to identify clothes, but, unfortunately, the President of the Board of Trade has lost that power through the Financial Resolution.

With reference to competition from Japan, I am very pleased to know that the right hon. Gentleman has given instructions that no more licences will be issued. That may appear to be a good thing. I dare say it is. But the most important question at the moment in that connection is: What will happen to the cloth already in stock? Will the right hon. Gentleman allow the stock that has been bought for export to come on to the home market? If any cloth that has been bought comes on to the home market, there can be no argument to justify any importation of Japanese cloths.

I ask the right hon. Gentleman to give us an answer to the question: Is any of the Japanese imported cloth being put on to the home market in competition with our own textile goods? If there is any element of that, no argument can be advanced to justify the importation of any more. The whole purpose of the importation of Japanese cloth was to keep open textile markets in other parts of the world, and if that is not being done, for goodness' sake scrap the idea altogether and stop any more cloth coming in.

The right hon. Gentleman exhorted the industry to use more machines. Does he realise that the circumstances of the textile industry make it almost impossible to put in any machines? Does he realise that a machine which is the fruit of the work of the Shirley Institute for the last two years, a machine the use of which is very desirable throughout the length and breadth of the cotton industry, and, to a certain extent, of the wool industry, cannot be bought by Lancashire textile mills at the present time? Or if it can be, the orders are not coming forward. I understand that only two or three of those machines invented by the Shirley Institute have been ordered for our industry, yet America is prepared to take them as fast as she can get them.

It is all very well our talking in this House and giving data or information that we can pick up in journals, and allowing that sort of thing to go on. It means that in the sizing department America can beat us hand over fist by using our own machines, which we cannot afford to buy. It may be that it is the outcome of initial allowances disappearing in the last Budget. That is nothing to do with the right hon. Gentleman; my right hon. Friends were responsible for that. On the other hand, the restriction the Government have put upon credit, and also the reduction in capital investment, will play their part in putting Lancashire and Yorkshire industries gradually behind scratch as time goes on.

The hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield), who made a very good contribution, made a very fair statement, but it would have been fairer if, when pointing out the disparity of 6d. a lb. between the price at which the Raw Cotton Commission was selling and the price at which it could be bought overseas, he had also mentioned the margins of the yarn spinners in Lancashire, and pointed out that the reduction they made three weeks ago of 10d. a lb. for 32s had more significance than any disparity in the Raw Cotton Commission prices for the past six months. The hon. Member for Louth (Mr. Osborne) knows about this, because a lot of 32s goes into the hosiery trade.

What does the right hon. Gentleman consider is the difficulty in Lancashire? Does he consider it as just a recession, or does he consider that it is a slump? It may be too early for the Government to have made up their minds. It may be too early for the Cotton Board and the trade as a whole to have made up their minds. On the other hand, it is not too early to expect that the Government should at any rate be able to assure us that they are planning in case this should prove to be a slump, and I beg the right hon. Gentleman to give us some indication, before the debate is over, of the plans on which the Government propose to work.

What were the factors leading up to the present situation? Until July of last year, the Cotton Yarn Spinners' Association were still instructing and advising their members to keep their commitments to within a six-months' period, which meant that many spinners were booked to the end of the year.

During the six years since the war, there have been many difficulties in the supply of raw cotton. The hon. and gallant Member for Rochdale covered that point, and I will not labour it, but the main one was the shortage of dollars. The next one, which he did not mention, was the physical shortage of cotton in the 1950–51 season, which forced the Raw Cotton Commission to go into other markets—Brazil, Uganda, Sudan, Egypt and the rest—to buy cotton at far higher prices.

If my recollection serves me right, the disparity between the prices at which the Raw Cotton Commission were forced to buy and the American prices ruling at the time was far higher than that suggested by the hon. and gallant Member for Rochdale. It meant that prices were gradually rising, and there is no incentive to purchase like rising prices, because when one has the goods in one's hand it is a grand thing if they are appreciating in value while one holds them.

Other difficulties about raw cotton did a tremendous lot in West Africa, East Africa, Sudan, Uganda and other parts of the world to set those countries on their feet, and the fact that during that period there was this demand for cotton from Lancashire did more good to these peoples than any Colombo Plan, however idealistic may have been its conception. The difficulties Lancashire suffered on account of cotton acquisition and the difficulties the consumer had to face on account of higher prices must surely be softened by the knowledge that those countries have woven something into their economies which, we hope, will benefit them for a long time to come.

I believe that the over-optimistic estimate on 8th August—and it was over-optimistic because the Cotton Bureau in America suggested that the cotton crop would be something in the region of 17½ million—really set the seal on the decline in prices. Just about that time, too, we could see the rise in the productivity in countries in Western Europe, India and Japan coming to their post-war peak, so we had two factors: one, a plentiful supply of cheap raw material in prospect, and the other, many producers glad to make the goods. As soon as that happened, there was buyers' resistance all over the world.

I am sure that the hon. Member with his expert knowledge would not wish to mislead the House. He said that Japan's efforts were reaching their post-war peak. Surely he is aware that Japan is only operating five million spindles now against 13—million spindles pre-war, so she cannot be near her postwar peak.

I am saying that it is her post-war peak. I am not talking about her pre-war peak. It was then nine million to 10 million spindles. Her postwar peak was reached in the middle of last year.

The hon. Member is not suggesting that is the limit to which she is going in the coming years?

Certainly not. Neither am I deceived by the reasons for the reduction in Japanese output at the present time, and I hope nobody else on the Front Bench opposite is.

I will tell the House what is the reason for the restriction of output in Japan. It is not because they cannot get rid of their stuff at near-cost prices; they are waiting for the inevitable slump in raw material prices. If hon. Gentlemen will watch this situation they will in time, I think, agree with me. The Japanese are very astute operators in this market.

The hon. Member says that Japan is waiting for the drop in raw material prices. Does he not accept that in point of fact that is what the cotton producers are doing throughout the world?

Yes, of course it is; but in the case of Japan a lot of people have the idea that Japan is prepared to operate at any time irrespective of conditions in the raw material market, and I am saying that Japan is doing this for that particular reason. So much for overseas. At home it was the cost of living, prices too high, talk of crises, talk of an early Election, fear of the restriction of credit with the buyers holding on—and a Tory Government did the rest. The hon. Member for Blackburn, East (Mrs. Castle), was nearly right when she said that it was aggravated. In November the Government said one thing and in the Budget they said another.

In November, the Government acted on a basis of restriction of credit which was to curtail consumer goods. When they came to the Budget, the Government had to change their minds because of pressure of opinion and the situation in Lancashire, and they told the House and the country that they could now carry on with the 1951 amount of consumption in consumer goods.

I do not want to weary the House, but the point I am making is a constructive one, and I feel that what I have said is quite necessary in order to point the way to what I am about to say. In the debate last week on the Export Guarantees Bill, I expressed the opinion that this question of exports of consumer goods was really approaching a new phase.

I said that at the end of the 19th Century and the beginning of the 20th Century competition in Western Europe for consumer goods for overseas trade was coming to an end, that a new pattern was emerging. I believe myself that there is a big shake-out taking place. So the question we have to ask ourselves is: How much can the trade itself and the Government influence and shape events? One thing that no trade or Government can do is to force someone to buy stuff that he does not want. Let us approach the matter from the practical end. The important thing is that we should be on the spot, ready and able to supply when trade revives.

I do not wish to quote figures to the House—there are masses of them to draw from—but the statistics that are available show that in each successive depression or slump, such as in 1919–22 and 1929–32 which both followed the same pattern, there is a recession, a raw material collapse, and then the entry by the low-cost producers of the world into markets that we had previously enjoyed. I contend that it is the two years after a slump has begun that set the pattern of how much trade can be expected to be retained when trade begins to flow again.

If we neglect any opportunity from now on, we shall rue the day. None of our textile industries in this country can exist solely on home trade. They must have a life-line overseas. Whilst the slump is on, it is not possible to distinguish between the efficient and the inefficient, because when distress selling is taking place the efficient and the inefficient are doing the same thing, often selling at half price. Prices fall further and the slump touches bottom at the moment raw materials reach this lowest price.

Improvement in trade follows when there is confidence that no more money will be lost in a falling market. It is then, and then alone, that the conversion factor comes into its own. It does so in the costing of any yard of cloth. It sorts out the efficient firm from the inefficient firm at that very moment. It is precisely at that time that the pattern of trade will be determined for many years. It is important that the early purchases should be from us. A slump every now and again suits a low-cost producing country down to the ground; such countries get into new markets. This time we must see to it that we are organised as an industry to cope with the situation.

With regard to cotton, the President of the Board of Trade should immediately, if he has not already done so, start consultations with the Cotton Board, and with the trade generally on the revival of British Overseas Cottons Limited or another organisation to improve on it. It was formed in the early war years to co-ordinate the different interests concerned with the making of cotton cloth— the spinners, weavers, finishers and converters. The right hon. Gentleman must not be fobbed off by objections from interests at the converter end. He should look at the problem as a whole. Let him examine it, take honest opinion on it and then act on it.

I am convinced that there will have to be co-ordination of effort not only between the Government and the industry but between every branch of the industry if we are going to do what I have in mind, namely, that we should hold on to every yard of cotton exports from now on. I have warned the President of the Board of Trade that the possibility is that any yard of cloth that we lose in exports during the next year or two will never be regained. The danger of losing our share in world wool markets is not so dangerous as in cotton. Nevertheless, we cannot afford to lose a yard.

There again, I would ask the President of the Board of Trade to consult with the Wool Export Corporation and the Export Credits Guarantee Department, together with all the other interests in the trade, including chambers of commerce, and get down to a basis where we can have a better spearhead for our exports, particularly in the dollar markets. I am not grumbling about what the wool trade has done. It has the finest record of exports to the dollar market, considering the difficulties that it had to face immediately the war was over and the way it was run down in regard to personnel. It has done a marvellous job. But we must now think about the preservation of its export trade, and I ask the right hon. Gentleman to act now.

My next constructive proposal is this. Never in this century has there been a better financial background to the textile industry than now. The hon. and gallant Member for Rochdale agreed that was so. He said that it was in good shape from a financial point of view. It is. It has been enabled to make profits which are now of great advantage to it. I say to my hon. Friends on this side of the House: in an industry which is dependent upon raw materials coming from abroad, which is subject to the vicissitudes of either fashion or demand all over the world, if the firms which are engaged in it are not allowed to make a profit in good times, who is going to pay the losses in bad times? [HON. MEMBERS: "Hear, hear."] Yes, but I am coming on to something which is not so palatable. It could be that with the selling of stocks at distress prices, firms will not be showing such good results before very long.

Of course, but even now there are firms who are paying 25 per cent., 30 per cent. and in one case 45 per cent. in dividends. I say emphatically that that is wrong at this time.

Would they be paying those dividends on the nominal capital or on the capital used in the business?

I do know a look at the statistics part of the "Economist" will not only give the hon. Gentleman that information, but will also give the yield against the money values which the hon. Gentleman mentioned.

The hon. Gentleman has raised on many occasions the allegation which he has just made about the textile industry. Surely he will agree that the rate of distribution in the textile group of industries since the war has been very modest indeed, more modest than in any other group of industries.

So modest that it is the highest in the century. [An HON. MEMBER: "No."] Yes. I ask the President of the Board of Trade: please conserve the assets that are now in the industry. Do not allow anybody from now on, in co-operation with the Chancellor of the Exchequer, to distribute dividends in excess of 5 per cent. I ask the Chancellor of the Exchequer to pay particular attention to this point. We must not lose the assets that the trade now have in their possession. High dividends should not be distributed.

I am afraid I cannot give way. Time is getting late now, and I want to allow somebody in before 7 o'Clock. [Interruption.] It is only fair.

The next point is about the D scheme. Can the President of the Board of Trade tell us whether the Chancellor of the Exchequer was serious when he spoke about consumption being as high in 1952 as it was in 1951? I do not for a moment think that that is going to be achieved. If this is to be one of the things which the Chancellor hopes will help to revive the textile industry during the coming months, I do not believe it will be done. This D scheme, with all its anomalies, will make it difficult for that result to happen. The Chancellor of the Exchequer is now the boss at the Board of Trade, so far as the consumer goods industries are concerned, and I ask him to take off the whole of the Purchase Tax from goods within the textile field, as a gesture to the textile industries. There are so many anomalies that I think he will be glad when he has done it, if he will but take the plunge.

Another point is—at The Hague at the present time there is an organisation under N.A.T.O. for ordering and distributing textile goods. I understand that considerable orders are being given out and that most of them have been taken up by countries such as Italy, Belgium and France. Would the right hon. Gentleman see to it that we are well represented on that organisation, and that at least we have a chance of getting orders if we are at all competitive?

I am not as pessimistic as some people may be. We can weather this storm. It may be that there is a contraction, but the energy and the capacity of the people of Lancashire and Yorkshire, the West of England and of Scotland, will be equal to the task.

6.56 p.m.

I am sure that the House welcomed the last remark made by the hon. Member for Ashton-under-Lyne (Mr. Rhodes). I particularly endorse it, and I think we can all agree with much that he said.

Except for one contribution, in which some appalling suggestions were made to which I am not going to refer now, so fantastic were they, the debate has been in the nature of a Council of State, so often advocated for debates in this House but so seldom attained. I hope that the remainder of the debate will be continued in that strain. It is only in that way that we can fully do justice to the very serious situation which has arisen in the textile industry.

Some of us who were here in the 1930's remember the similar situation which arose then. It is, indeed, a disappointment and a sad day for us that something on similar lines seems to be starting, although we hope and pray that it will not develop into the depths of unemployment we reached in those days. Any hon. Member who has any regard for the people in his constituency must feel depressed at the thought that we are passing into a very anxious time. We gradually restored the position before the war started in 1939, but the trouble about the present slump—if it is to be a slump—is that it has come about so suddenly and is so thoroughly unexpected.

One thing that stands out is that it is through no fault of the present Government. At Christmas, 1949, there was a small recession in the spinning section of the industry. Again, in August and September, 1950, mills were stocking cotton yarn because salesmen could not find a ready market. Then came Korea, which rescued that situation. Last autumn, there was a recession and the position has not improved materially since that time. That was many weeks before the General Election. Therefore, I say again that the present position is certainly no fault of this Government; nor, as has been said by other speakers, are we alone in this matter. It is worldwide. Six months before last Christmas they were on short time in the United States—and the position has not improved since then—and the same situation applies in Japan and India. Many reasons have been given for this and—

It being Seven o'Clock, and there being Private Business set down by direction of The CHAIRMAN OF WAYS AND MEANS under Standing Order No. 7 ( Time for taking Private Business), further Proceeding stood postponed.

Ealing Corporation Bill (By Order)

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

7.1 p.m.

We are able to congratulate ourselves for a short time in that this is a Motion on which there is likely to be no contention between the political parties in the House. The parties concerned in the Bill are the Ealing Borough Council, which has a Conservative majority, and the Middlesex County Council, which also has a Conservative majority; and, I would add, that is likely still to be the case after the local government elections in April. The case for this Conservative county council, in its opposition to the Bill, will be argued, I understand, by two hon. Members from the benches opposite, which gives an all-party flavour to the debate.

It would, perhaps, be for the convenience of the House if I started by saying that, unlike the case which so often occurs in Private Bills, there is here no question of any extension of boundaries being sought by the Ealing Borough Council. This is simply a Bill to achieve county borough status for a non-county borough.

I make no secret of this fact: very serious questions of principle are involved concerning the local government of Greater London, and I shall refer to this in some detail later in my speech. I want to start, however, by dealing with the case for making Ealing a county borough, leaving on one side for a moment the question of the results which might flow from that in Middlesex and in Greater London.

The county council involved—Middlesex—governs the largest county in the country outside London. Ealing, the borough which is promoting the Bill, is the largest non-county borough in Great Britain. We have here, therefore, a case in which the largest non-county borough and, outside London, the largest county council are together involved. The borough of Ealing was incorporated in 1901, so that it had the happy chance of celebrating its golden jubilee last year in the year of the Festival of Britain.

At the 1951 census, Middlesex had a population of 2,268,776, and the population of Ealing was 187,306. The Bill would remove from Middlesex 8.3 per cent. of its population and 8.4 per cent. of its rateable value—surprisingly level figures. Middlesex, without Ealing, would still be the largest county outside London. It would still retain nearly 140,000 acres, more than two million population and a rateable value of over £20 million. Finally, in what I am afraid are rather dull preliminary statistics, I should perhaps say that Ealing is at present larger than no fewer than 66 of the existing 83 county boroughs in the country and has a higher rateable value than 69 of them.

Why does Ealing seek county borough status? In Ealing we believe that Middlesex County Council has too large a population to enable certain matters to be properly administered, and we believe that Ealing is too large a borough to come under the authority of a county council. We believe that a population of 2,250,000 is too large to be governed as one unit, even with a delegation of powers in matters of education, health and welfare. We believe that a county councillor who has no fewer than 26,000 constituents with whom he should keep in touch cannot possibly remain in close touch with them and still take part in administering these complicated matters.

This ceases to be local government and becomes something very closely approaching central government. I understand that the hon. Member for Tottenham (Mr. Messer) is closely concerned in the opposition to this Bill, and I am very happy to call him to my aid in this matter because, with that very clear judgment and authority which we always expect from him in local government matters, he used some words in the debate of 26th April, 1950, on the Ilford Corporation Bill, which seem to me to put our case better than I could possibly hope to put it. He said:
"We cannot go on claiming the need for extended social services unless we create the instrument by which they can be administered. What is happening? We are in an anomalous position. We are pressing for expansion of the social services, and saying that the minor local authorities cannot do the job As a consequence, we give the work to a larger authority which has to delegate part of its work to the minor authority, and we get such hybrid things as divisional executives and such completely anachronistic things as area health committees, where county councils plus representatives of a local authority form a committee to do work which could quite easily be done by an independent local committee."
Nothing can be more sensible than that, Mr. Speaker, and I am sure that the House would agree with it. The hon. Member for Tottenham went on:
"What is fearsome about this is that our failure to face up to this situation means that central Government steps in and does work for which it was never intended, and we are watching a passing from local government to central Government of powers which the central Government is not the best type of instrument to use. I mention this because I hope the House will not accept the idea that we cannot face this problem. It has to be faced, and unless we do, local government is doomed to disappear."—[OFFICIAL REPORT, 26th April, 1950; Vol. 474, c. 1074.]
That seems to me to sum up the case of Ealing Corporation on this Bill better than I could possibly do it. Ealing believes that if a service can be run locally, it should be run locally by people on the spot who are in close touch with those whom they represent. There are 60 local men and women on the Ealing Borough Council. They ask, very naturally, why they should have to apply each year to the county council, for example, for a licence before they can promote or permit an entertainment in any of their 1,000 acres of parks and recreation grounds.

They ask, why, when the borough council already maintains 22 miles of existing trunk and county roads in the borough, not to mention 130 miles of district roads, they should not control and maintain the remaining 16 miles of trunk and county roads.

With 65 primary and secondary schools under their management, they want to know why the Ealing Corporation should not run the education service in their own right in the borough, instead of by delegation from the county council. Middlesex is a good education authority. There is no question about that whatsoever. Ealing, as a former Part III authority, now an excepted district, has very wide powers of delegation given to it, but the county council supervision still extends beyond financial control and beyond questions of major policy into matters of day-to-day administration which, as I shall show with examples, involves very serious delays on matters of quite minor importance.

The people of Ealing ask, quite naturally, why their local representatives cannot run the local health service in a proper alliance with the sanitary services which are already under the control of the borough council. The medical officer of health for Ealing, unlike his counterparts in other Middlesex boroughs, has remained since 1948 a borough council officer, giving about 60 per cent. of his time to the county council. He has eight full-time and six part-time doctors and 210 other staff under him.

At present there is an area health committee which covers Ealing and Acton, and Ealing has on it seven representatives out of a total of 24 on the committee. Even this committee's recommendations are nearly all subject to the over-riding jurisdiction of the county health committee and one of its sub-committees, on neither of which the area medical officer of health sits. Nor is he permitted to attend it.

In fact, the Ealing medical officer receives his copies of the minutes of the meetings of these committees more than two months after they are held, and that seems to us to be an example of the sort of difficulties which are put in the way of an efficient local administration. Inevitably, in this sort of system one gets examples of wasteful duplication of time and effort on the part of officials and committees dealing with the same problem in probably exactly the same way.

I would emphasise to the House that this is not an example of local people with big ideas who are thirsting for power and are trying simply to up-grade a small authority into something larger. I want to give the House a couple of examples which will indicate that the present situation actually results in hardship to ordinary men and women whom the social services are designed to serve.

I hope the House will bear with me if I mention these two examples. I shall try not to take too long about them, but it is essential to get the discussion away from purely academic administrative questions and the theory of local government reform and to show how these things affect the ordinary men and women in the borough and in the county.

In October and November, 1949, Ealing borough took up the question of leave of absence for four married women teachers who were expecting babies. It seemed a fairly simple question, but correspondence about the position under the county council's regulations, which were by no means clear, went on nearly six months after the babies were born.

That was bad enough, but there is far more to come. After this, Ealing submitted a firm recommendation to the county council suggesting what sick pay should be granted to these teachers. Eighteen months after that recommendation had been made no decision had been handed down from the county council and the county educational officer had not submitted the matter to the education committee. I do not suggest that this is an example of gross bureaucratic dictatorship by an official. It is not. We have the highest respect for the county education officer, and he was simply trying to keep matters of detail away from a grossly overworked education committee which is trying to cope with a job too large for it.

However, after a strong protest from the borough education officer, the county education officer wrote on 20th February, 1952—this had started in November, 1949—to say that the county council had granted sick pay to the teachers on precisely the basis for which Ealing had asked 18 months earlier. It was actually 19½ months after Ealing made the recommendation that it got precisely the decision for which it had asked in the first place. Meanwhile, the teachers had suffered.

There is an even more glaring example of what can happen. In the spring of 1950 there was some trouble in the staff kitchen of one of the schools in Ealing. After very careful investigation by the borough school meals organiser, the Ealing education committee transferred the cook-supervisor in that school to another school. Some time later there was exactly the same trouble all over again. A sub-committee of the council heard representations from the staff at the school and from the supervisor herself, who was represented at the hearing by a trade union official, and, after a long meeting, decided that the supervisor ought to be dismissed.

The supervisor appealed to the county council staff appeals committee, who ordered that she should be reinstated. The county council could not find her a job outside Ealing and she had to be placed again in her own school. Within a fortnight the staff was seething with trouble again, and it was clear that the children's meals were actually suffering as a result of this. It was again decided to dismiss the supervisor. She again appealed to the county council staff appeals committee and was finally reinstated a second time.

The borough council may have made two mistakes, but they do not think they did. They ask what sort of a system it is that prevents an authority of this size, which has a school meals staff of 436, from dismissing an employee earning £280 a year without taking up hours of the time of officials and councillors of two authorities and then being overridden at the end of it. There are numbers of other cases which I could quote, but I shall not weary the House with them.

I submit that the case for granting county borough status to Ealing can be made on the grounds that it is a viable authority in size and an efficient authority, and that the existing duplication of powers results in inefficiency and in suffering to the inhabitants of Ealing.

For the last part of my speech I must turn to the case against the Bill, which I want to consider quite honestly and frankly and try to see how we can beat the objections. There are, first, the detailed objections which the county council have put forward in their statement against the Bill. The county council claim that the removal of Ealing from Middlesex would inflict:
… very grave injury on the remainder thereof and would seriously disorganise the administration of the important services for which the county council are responsible."
Our view is that that contention is not true. It would make the services in Ealing better and it would relieve the burden on the staff and committees of the county council and enable them to administer better the services over the remainder of the county.

It is also contended by Middlesex County Council that to constitute Ealing a county borough would increase the burden on the ratepayers in the remainder of the county. I have already said that the removal of Ealing from the Middlesex County Council would remove 8.4 per cent. of rateable value and 8.3 per cent. of population.

Neither I nor anyone else in Ealing proposes to try to contend that it would not mean some extra burden on the ratepayers in the remainder of Middlesex, because it is obvious that the overheads of administration in Middlesex would be spread over a smaller population and a smaller rateable value, but we contend that the extra burden would be very small.

There are one or two other detailed points which the county council makes. They have sought to make capital of the fact that certain services are specifically excluded from the terms of the Bill which Ealing Corporation are promoting. They say that Ealing Borough Council recognise that there are some very important functions which should be discharged by the council of a county borough, but which they are quite unable to discharge. That is grossly misleading and, with respect to the Middlesex County Council, a somewhat tendentious way of putting it in view of the instances which they then proceed to cite: namely, the duties of a fire authority.

Of course, Ealing has in the past run its own fire service, and has run it very well; and it is perfectly capable of doing so in the future. It was, however, felt that the county fire organisation ought to be maintained in the interest of efficiency and service to the remainder of the county. It would, obviously, be ridiculous to upset the operation of the present West Middlesex sewerage authority, which, we are proud to say, is one of the best, if not the best, in the country.

—but I did not want to appear to be claiming too much for Middlesex.

There is now the question of the famous proviso which was inserted in the Local Government (Boundary Commission) Act, 1945. I ought to refer to this, since the county council in their statement have made something of a point of it. It is perfectly true that there was in the Local Government (Boundary Commission) Act, 1945, which has since been repealed, a proviso which said that no part of Middlesex should be constituted a county borough. But I must point out that this question was raised on the Committee stage of the Bill, as it then was, by an Amendment which was moved by the then hon. Member for Manchester, Moss Side, seeking to remove this proviso from the Bill.

My hon. Friend the Member for Cambridge (Mr. Hamilton Kerr), who was then Parliamentary Secretary to the Ministry of Health, pointed out in his reply to the debate on the Amendment on 5th June, 1945, that there were many urgent problems which the Local Government Boundary Commission had in any case to deal with, and that it was felt that the problems of Middlesex Boroughs should be left until later. He therefore resisted the Amendment to delete that proviso. In replying for the Government, however, he never attempted to suggest that the proviso was inserted in order that the position of Middlesex boroughs should be frozen indefinitely.

It is quite wrong to suggest that that proviso excluding Middlesex from the terms of reference of the Local Government Boundary Commission represented the view of that or any other Government that no local government reform should ever take place in Middlesex which would involve the creation of a new county borough. It was clearly pointed out by my hon. Friend, on behalf of the Government, that it was simply a question of not overloading the Boundary Commission, with the great amount of work that they had in any case to do.

Finally, I must deal with the main point of substance which the supporters of the Middlesex County Council make in their opposition to the Bill. This is a question of principle: the question of the reform of the local government of Greater London, of which Middlesex forms a part. It is asked: Ought Ealing to be taken separately in this respect? If county borough status is given to Ealing, even though it is the largest non-county borough in the country, shall we not open the floodgates to a number of other non-county boroughs and urban districts? I see, for example, one of the Members for Harrow—my hon. Friend the Member for Harrow, East (Mr. Ian Harvey)—sitting here, and Harrow, as the House knows, with a population of over 200,000, is still an urban district. There are innumerable anomalies in the organisation of local government boundaries and functions in Middlesex.

But ought we, then, to open the way to a process which might convert Middlesex into a complete series of county boroughs? It is asked: Are we, then, prepared to face what would amount to the complete abolition of the Middlesex County Council? That is a question, clearly, which we must face.

In fact, the Middlesex County Council would not disappear entirely. It would remain, at the least—I mean no insult to the members of the Middlesex County Council—a joint sewerage authority and there are, no doubt, other powers which could profitably be preserved. If the hon. Member for Southall (Mr. Pargiter) asks me, for example, as he is entitled to do, whether I should be prepared to try to persuade the House to pass the Bill even though it would mean the dismemberment of Middlesex as an administrative county, I am entitled to ask him another question in exchange: Is he, with a knowledge of local government in Middlesex which is very great and very long, prepared to say that no measure of local government reform should ever take place in Middlesex, or that the present boroughs of Middlesex with populations of between 150,000 and 200,000 should remain in their present condition and should never be upgraded to the status of most-purpose authorities?

I think that the hon. Member would refuse to take that extreme line, and would say, "No doubt, Ealing should be given greater powers, but this must be done as a comprehensive operation taking in the whole of the County of Middlesex." It is this point with which the House in the last resort would have to deal, and on which it will have to take a decision this evening.

I am extremely glad to see my right hon. Friend the Minister of Housing and Local Government on the Treasury Bench tonight, because I want to assure him that the Ealing Corporation has not deliberately gone out of its way to embarrass him by suddenly precipitating the whole question of local government reform at a time when he has many other weighty problems on his mind.

We think that we are giving the House of Commons a chance to take a positive and constructive step towards solving a problem which has been embarrassing the country for many years. We say that the position has been getting steadily worse. No new county borough has been constituted since 1926. The position in Greater London has been getting worse for a long time, and will continue to get worse.

Over and over again, when the Ilford and Luton Bills came forward, for example, in the last Parliament, and when any question of local government reform arises, we are always told, "It is very difficult; it is an immense problem. We had better postpone it until we have a little more time to deal with it." Even when the Local Government Boundary Commission was set up in 1945, only to be abolished a few years later, we were told that it must not deal with the question of local government reform in Greater London; that that must be excluded and must be postponed even further than the reform of local government elsewhere.

We in Greater London are beginning to feel that we shall never have the question of local government reform in Middlesex tackled at all, because it is a difficult matter. It is an immense problem, and the tendency with busy administrators is always to say, "If we can stave it off a little longer, let us do that." We in Ealing think that the House of Commons now has an opportunity to present to the Government and to the people who are interested in local government reform something which they have never had the opportunity of having before. That is a complete examination which will go on the record in the form of evidence, examination of witnesses and putting of the case by the county council and by its largest non-county borough in Committee upstairs, which will then be on the record as a basis for a future Local Government Boundary Commission to work on.

I think we can go one step beyond that and provide something even more useful. Middlesex County Council has now said—I do not wish to be ungracious, but I think they have been a little late in saying this and are only saying it now under the pressure of the depositing of the Ealing Corporation Bill—that they are prepared to discuss with the junior authorities greater powers of delegation.

On the other side, Ealing Corporation says—and has specifically stated—that it would be willing to consider certain concessions in the details of the Bill which would go even further towards making it a most-purposes rather than an all-purposes authority and which would make it almost exactly correspondent to that new county borough which the Local Government Boundary Commission recommended for populations of approximately the size of Ealing.

We think that as a result of this willingness to make concessions on the part of Middlesex in the matter of delegation and of the willingness of Ealing to make concessions in the powers they are obtaining under this Bill, the Committee might be able to hammer out the prototype of the new local government authority for the County of Middlesex. That would be a terriffic achievement. It would be something we have never got within miles of having before and something which, if this Bill is rejected on Second Reading tonight, we might never get or at least not get for so many years that the problems will have got almost out of control.

The House of Commons has it in its power tonight to do this and make this very great and constructive contribution to a most difficult problem which is not within measurable sight of solution. It can do that simply by giving this Bill a Second Reading and sending it upstairs to a Committee, I most earnestly and warmly urge the House to take that course and give this Bill a Second Reading tonight.

7.32 p.m.

I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof:

"This House refuses to give a Second Reading to a Private Bill which will have such far-reaching effects on local government in Middlesex and considers that it is undesirable for a matter of such major importance to be dealt with by Private Bill legislation."
May I first congratulate the hon. Member for Ealing, South (Mr. Maude) upon the able and persuasive way in which he has presented a case. He must have felt he was skating on rather thin ice on occasions, particularly when he was dealing with what he called in advance some of the objections, which are so manifest, to giving a Second Reading to this Bill.

The Amendment sets out the burden of the case against giving a Second Reading to this Bill. I want first to warn the House that I believe that there are some hon. Members opposite, and there may be some on this side, who suggest, "We will give the Bill a Second Reading tonight and kill it in Committee." That is not a very good method of dealing with the matter.

If it is the intention to kill the Bill, it should be killed now. There should be no argument; if it is good enough to have a Second Reading on the factual evidence alone, it is entitled to get the support of the Committee upstairs. I want to be quite frank about that, because no one would want to say that Ealing is not a well-governed borough. No one would want to say that Ealing has not the resources to carry out the functions it is claiming in this Bill.

It has set out a very good case as to the resources which would be available and Ealing says, equally purely from the point of view of the resources, that this would not make the county less viable as a county—not of itself. That is acceptable, and we are on common ground there.

But the danger is, I am advised, that if this Bill gets a Second Reading the Committee upstairs will not be able to go into the details of the effect of this on other boroughs of Middlesex which are equally entitled to claim county borough status. It would be kept to the very narrow limits of application to Ealing without being able to introduce in the Committee what would be extraneous matters, such as the effect on a large number of boroughs and urban districts in Middlesex which would be entitled to take advantage of the precedent which would be set if the House gave a Second Reading to this Bill. For that reason, I am extremely anxious that the Bill should not go upstairs but should be dealt with here in order that the issue as to the relationship of Ealing to the County of Middlesex and the relationship of Ealing to other districts can be clearly settled.

The first paragraph of the statement on the Bill says:
"It is promoted in the interests of the efficient administration of local government in Ealing [and] does not affect the boundaries of any other county district."
It does not affect the boundaries of any other county district, but it is significant that Ealing happens to border on 10 of them, and I can hardly see, with the types of services running all round them as part of the county services, that there will not be some difficulties in the relationship of these boundaries which may well have accounted for the fact that, quite magnanimously, Ealing is prepared to leave the county with the fire service. Otherwise, there would be some difficulties on the question of mutual support but they feel it highly desirable not to embark on that.

I accept that they could run the service quite well, but perhaps I might mention that the practice in Middlesex, as is well known, is that the ambulance service is run under fire service control. It is a health service, but the health department have delegated this service to the fire brigade committee and the communication system of the fire service is used for the purpose of controlling the ambulance service and calling ambulances and so on. It is also a fact that the ambulance service is under the control of the chief fire officer.

This matter has not been touched on, but it is of such importance that I can hardly imagine that Ealing had not thought of it, and I am wondering why they have not referred to it because it is undoubtedly an important point when the question of administration crops up whether Ealing wants to run its ambulance service through the communication system of the fire service or to contract out altogether from the fire service or to have the county committee running the ambulance service. That is one point where questions of administration assume some importance.

I do not wish to detract from the importance of the Borough of Ealing. It claims to be the oldest borough, and I will concede that. I also concede that it has had very lusty growth. It has been a very strong and promising infant, but it did not achieve its population for the purposes of county borough status in accordance with the existing Statutes until 1925–26, whereas such districts as Willesden achieved a population of 75,000 as far back as between 1891 to 1896. Tottenham achieved that population at that time, and also Hornsey between 1901 and 1904. It will be seen that in some respects they are comparatively new, and what will happen in Hornsey, a very distinguished borough, in the event of this taking place will be that they will say, "We have been established all these years and this relative youngster of Ealing gets county borough status. Obviously, we have to do something about it."

Apart from that, there are other questions, and the wider intention of Parliament in relation to this. What was the intention of all parties in the House in their acceptance of the Education Act of 1944, which specifically transferred functions from Ealing, among other places, to a single local education authority, which it said should be the county? It did this for specific reasons, because of the wider obligations and implications of education. When these small districts were education authorities, Ealing was responsible for its primary education. It has never been responsible for its secondary or higher education. In fact, I believe it is the purpose that the technical college situated within the boundaries of Ealing shall remain a county service and that Ealing will pay for the places they want in that particular college.

This matter of the technical college does need qualifying. There is no question of Ealing wanting to leave to Middlesex a technical college which it could not operate. In fact, of course, Ealing is claiming to be the technical education authority, and it could have asked in this Bill to take over the new technical college. But since arrangements have been made with the county that, for mutual convenience, it should be built and used by the whole county or by a large part as a catchment area, it was a condition on the part of Ealing that instead of keeping this for themselves they should seek to leave it to the county.

The hon. Member has made my case for me regarding that particular service. It is because technical colleges and further education generally must cover a wider area. In order to give variety of training in a technical college it must have a very wide catchment area. In other words, one county district autho- rity cannot run a technical college, because technical colleges must have a particular bias for particular services. If a technical college service is to be run efficiently, it must have the widest possible catchment area. In a technical college one has to specialise—not in technical schools, but in technical colleges. In Middlesex we have specialised, and we have planned our technical college with that specialisation in view. There are many scholars from Ealing who are going to other technical colleges in other parts of the county to receive the particular type of education they are seeking. That is the important part about it.

It goes even wider. There are standard arrangements between the Home Counties, because even Middlesex does not cover in certain parts so wide a field as it might. So we have reciprocal arrangements with Surrey and London, and on the other county borders, and so on. We take people from them, and in certain cases we send students to other colleges. That is a very good arrangement, but does it help that arrangement if we stick a lot more cogs in the wheel? Technical colleges, above all things, lend themselves to a very highly specialised type of administration. It is not so much a question of the ownership of these services as the function by which the services are given. So on those grounds I would say that the hon. Member for Ealing, South has helped to make my case.

It is highly desirable that we should run it because of the wideness of the catchment area it must serve. That seems to be one reason alone for the rejection of this Bill. But it comes back to the whole question of the width of operation of service. It must operate a wider service. What is true of technical colleges is becoming increasingly true of all forms of higher education. The number of children who come from Ealing to other schools in other areas in the county of Middlesex, quite apart from technical education, is very consideragle indeed.

Let us look at the health service. It is stated that
"Ealing had well-developed health services prior to 5th July, 1948. Since that date the Medical Officer of Health has given part-time service to the County Council, as also have certain other officers in the Health Department."
To say the least of it, that is an understatement. The fact is they became county officers. They did part-time service, and lesser part-time service to the health service in the Borough of Ealing, so that the position is precisely the reverse of that stated in the statement in support of the Bill. In fact, they are county officers and would have to be taken out of the county service, if they consented to go, and would go into the service of the Borough of Ealing. There again we have to consider the difference between the statement here and the facts. I am not saying it was done intentionally, but the fact is they are not officers within the control of the Borough of Ealing at the present time.

No. The Medical Officer of Health, Dr. Booth, is in fact an officer of the county council.

The hon. Member must excuse me, but that is not so. It is so in the case of most boroughs, but in the case of Ealing there was a special arrangement by which Dr. Booth remained in the service of Ealing Borough, and gave 60 per cent. of his time to the county as a part-time servant of the county. It is an exception.

Quite frankly, I recollect the negotiations and my recollection is that the greater period of time was given to the borough, and he in fact became a county officer. We actually approved his appointment for that particular service. However, I will concede that. But certainly the other officers are county officers and I gather that the hon. Member will not wish to pursue that. We can accept it that the vast majority of the officers are county officers. I will examine the position with regard to Dr. Booth and see what we can do about it.

Again we have the intention of the Health Act to transfer certain services to larger authorities, and I believe the arrangement works quite well. The service has in fact been very largely decentralised. We have not kept a tight hand on this. I had something to do with the arrangements for the de-centralisation of that service. After it was transferred to the County Council we were not able to transfer back to Ealing, because it was not permitted by law. But we divided Middlesex up into 10 convenient areas. We added Acton to Ealing for the purpose of forming an area, and I believe it functions quite well. We have heard no complaints about it. So they have adequate powers to deal with services with which they want to deal in their own localities. I would not say that the thing is perfect, but I would say it is working very well.

If Ealing gets this Bill, what do we do with Acton? We should have to do something with Acton and we should have to begin to re-cast the Health Service arrangements. When we consider an administrative machine of this kind the whole question is much wider than saying that Ealing would function on its own. Before we make a change it is highly important to look at the whole ramifications with which we shall be concerned in making that change. It seems to me therefore on those grounds that that is another point in support of my case that Ealing should not get their Bill at this stage.

I appreciate the magnanimity of Ealing in not proposing to take over that section of the Metropolitan Police. I should like to see them try.

I wonder if they really thought they could get police powers, even if they tried? We have none as far as the standing joint committee of Middlesex is concerned, and we are never likely to get any either, so I do not think that Ealing's chance would be very great.

I want to deal with one or two other factors. The first is that this, obviously, cannot be presented as the unanimous desire of the people of Ealing. It cannot even be represented as the unanimous desire of Ealing Borough Council because out of 60 members—and this I will put to hon. Members who might be inclined to vote for this Bill in the belief that there was enough demand for it in Ealing—only 34 actually voted in favour of the proposal. That, surely, is a very narrow margin in a very large borough.

To be fair to the Ealing Corporation, I think the hon. Gentleman should say how the remaining 26 voted. He has created the impression that out of the 60, 34 voted in favour and 26 against. In point of fact, as he knows, it was nothing like that.

There are 34 positive people who want this. There are some who did not vote and some who voted against it. But, quite apart from that, the case which has been presented is that of an insistent demand from Ealing for these powers. One cannot have it both ways; one can only take note of those who positively want it. Supposing we say, as we should in a proper democracy, that the members of the council are a reflection of those they represent—probably those they represent would in many instances deny that—the proportion becomes 34 people who want it as against 26 who either do not want it or do not care whether they have it or not.

Is that the basis upon which a claim of this kind can really be established? I agree, of course, that there is a good case for examination and alteration of local government. I am not denying that, but we cannot get away from the fact that when the Boundary Commission was set up it was unanimously agreed in this House that Middlesex was excluded from its provisions regarding the creation of county boroughs within that county. That was done explicitly because it was recognised that Middlesex was in a peculiar position compared with the rest of the country. Whoever tackles this question will have to tackle Middlesex in a special way.

Let us have a look at the effect. I repeat what I said that if this Bill goes upstairs the Committee will be pledged to consider, not the wide effects which the giving of these powers will have on the rest of the County of Middlesex, but whether or not Ealing shall have these powers. Ealing, of course, would make out a very good case as to why they should carry out the function with which they are charged.

I believe that in Middlesex there are nine boroughs with a population of more than 75,000 each. There are two urban districts with populations of more than 75,000. In fact, there is one urban district with a very much larger population than the vaunted population of the Borough of Ealing which is seeking borough powers. This thing has not been going on in a vacuum and fought out by Ealing alone. There has been a good deal of consultation between certain boroughs in Middlesex—not public, but private consultation—and Ealing is the spearhead of a movement in which at least six out of the others are interested. If this Bill goes through, the others are already queueing up ready to put forward their own claims.

What would be the position of this House if we agreed to this? Could we then disagree with the others? The county council have provided a statement and a map which shows at one end the authorities with a population of below 75,000 and one or two other odd bits here and there which are also put below the 75,000. The vast mass of the county is concentrated within 11 areas, each of which could and undoubtedly will put forward a similar claim. They are only waiting to see the result of this Bill before lodging their own.

I say quite deliberately that this is not an isolated movement on the part of Ealing, but a concerted movement in which other authorities are interested. If this Bill goes through—it has been presented very persuasively in the hope that it will—it would be the end of Middlesex as a viable county. There is no question about that because the other authorities are only waiting their opportunity to come forward with similar Bills.

I am not arguing at this stage whether Middlesex as a county should remain. Many reasons might be adduced why it should not. I am only concerned that it should not be extinguished by these particular means. If it is going to be extinguished, let it be done properly. Let us even take it out of the arena of local government reform and deal with it as an urgent and pressing problem on its own. I warn hon. Members that when they tackle this matter they will find a lot of other problems.

I ask the Minister of Housing and Local Government how he would like to have 10 or 12 county boroughs added to those authorities with whom he will be negotiating on the outskirts of London, and whether he will examine the effect on the services that feed their way through Middlesex to London, and so on. On all counts, therefore, I submit that this Bill should be rejected at this stage. I do not say that because I have no regard for Ealing. After all, I represent a part of it, which I am very happy to do. I regard Ealing as being very highly placed among the public authorities of this country both as regards its ability and its efficiency. But, having given it that, there is no reason to give it more at this particular stage, and, therefore, I ask the House to reject this Bill.

8.0 p.m.

I intervene in this discussion as a member of a local authority larger than Middlesex, which gives me considerable sympathy with what the hon. Member for Southall (Mr. Pargiter) has said, and as the representative of a constituency which has an urban district council area larger than Ealing, which gives me some additional sympathy with what my hon. Friend the Member for Ealing, South (Mr. Maude) put forward in a most eloquent and measured way.

I feel that the whole of this subject is bound up with our consideration of local government reform and I most earnestly hope that my right hon. Friend the Minister for Housing and Local Government will be able to tell us when he will be prepared to tackle this urgent problem. For that reason I think we should be exceedingly careful when considering any radical reform of local government, particularly in the London area, because London is one of those areas which at present is complicated by the vast ramifications of London County Council which impinge on the Home Counties. In my opinion the ramifications of county councils are far too great and I think it will be agreed that county councils, Middlesex among them, are endeavouring to carry out more than they are equipped to do.

I am quite convinced that unilateral action with regard to one single borough council in a county council area, such as it is intended in this Bill, is not a practical proposition. I do not hesitate to say, though I do not speak with the authority of the Harrow Urban District Council—which we all hope very much will be a borough itself before long—that if this request by Ealing were successful we, as a numerically superior organisation, would have equal claims to have our case considered if we so wished.

The hon. Member for Southall dealt with an aspect of this matter which I think is most important. It is the question whether or not we should allow this matter to go any further having regard to the fact that the practical application of this Bill is not desirable at the present time. To me that is the most important consideration. I listened very carefully to the hon. Member when he was discussing that aspect of the Bill. He said that if it went upstairs it would be only open to the Committee to discuss the whole proposition as it applied to Ealing alone.

I put it to the House that that in itself is not a bad thing. We have already had references to the Luton Bill and the Ilford Bill, and I think the hon. Member put his finger on the pulse of the matter when he said that other Bills were likely to come forward. Therefore, the House is faced with either having similar Bills coming forward to receive similar treatment or letting this Bill go forward for consideration in Committee in order that some of the very intricate and very valuable points put forward by the hon. Member for Southall might be considered in greater detail.

That is the main question and I was not altogether convinced by the argument of the hon. Member for Southall that because Ealing Corporation were not unanimous in putting this forward, it should not come forward at all. After all, there are Acts of Parliament which have gone forward from this House without unanimity and yet have proved none the less valid.

While I would not wish to imply that there must be unanimity I said that there should be at least a large measure of agreement.

That is perfectly reasonable and I think there was a large measure of agreement among the members of the Council. There is sufficient measure of support for this Bill for it to receive the consideration of the House despite the argument the hon. Member put forward on that issue.

The hon. Member seemed to start off his speech by arguing against the principle of piecemeal variation of local authority boundaries and powers. Now he seems to have entirely switched over and is supporting the Bill. Would he say exactly where he stands?

I am very much obliged to the hon. Member for underlining the quandary I am in which, in fact, makes it difficult to reach a decision. I agree that it is not a practical proposition to take this piecemeal action with regard to Ealing, but I see no reason why this House, with its powers, should not consider this proposition in greater detail in order to deal with the points the hon. Member for Southall made and to ex-mine it in Committee where more time is available and every possible source of information can be consulted. Otherwise, we shall continue to have this stalemate of Bills coming up and being sent back without further reconsideration of the facts.

If we were all agreed that there was need for local government reform, this action should be taken at once and no Bill rejected, but I believe that all of us—and most of us here are concerned with local government—think there is need to investigate the present system of local government. We have to decide how far centralisation brings the benefits claimed by the hon. Member for Southall and how far decentralisation brings the actual machinery of government closer to local interests, which was well outlined by the hon. Member for Ealing, South.

Therefore, in reply to the question put by the hon. Member for The Hartlepools (Mr. D. Jones) and in summary of the point I make, I think this is not an immediately practical proposition and that there are aspects of the Bill which require further investigation. I do not think this is a Measure that should be summarily turned down. It is a Measure that would benefit from going upstairs to a Committee. Until my right hon. Friend is prepared to bring forward a major scheme of local government reform, which many of us think is long overdue and is now urgent, I would not be prepared to see the Bill go further than the Committee stage. But we owe it to ourselves and those concerned in local government to let it go forward for examination in greater detail.

8.9 p.m.

The detailed exchanges between my hon. Friend the Member for Southall (Mr. Pargiter) and the hon. Member for Ealing, South (Mr. Maude) show quite clearly that this House is not the place where a final decision should be taken on a complex problem like this. If this Bill is given a Second Reading, it will go upstairs to a Committee and the Committee will be able to deal in far more detail than we can with its pros and cons. It will be for that Committee, which is an organ of this House, appointed by this House, to decide whether the Bill should go through or not.

I am not particularly concerned with Ealing. What I am concerned with is the very general problem of local government reform that this House will have to face sooner or later. This has been a pressing problem for very many years. Local government reform is something that ought to take place with a reasonable degree of regularity if the change in social, political and economic organisation of this country progresses at anything like the rate it has done over the last 30 or 40 years.

Local government reform was due to be dealt with before the war; but since the war very drastic changes have taken place, not as a result of the normal development of local authorities but of legislative action in this House and a very important part of our local authorities—the non-county boroughs—have found themselves steadily stripped of a large number of functions that they had performed with very great efficiency. They have lost gas and electricity to the public corporations; and to the county they have lost either the actual administration or, at any rate, the final authority in fire, planning, local health, education and the police.

Those changes may have been good or they may have been bad. It depends very largely on the non-county borough that lost those services and the county that acquired them. In the case of a tiny non-county borough, there may well have been a very considerable increase in efficiency; but that does not always apply. I can think of some tiny non-county boroughs in some counties where even the transfer from the small non-county borough would mean a loss in efficiency because the county itself was hopelessly inefficient.

To suggest an increase in efficiency by transferring services from Ealing to the county is quite untenable. Ealing is sufficiently large to maintain a highly efficient municipal service of any type whatever. Indeed, I am not sure that there is not a loss of efficiency in transferring to a very large authority many of the services which Ealing—as a medium sized authority compared with the county—could render. While this very rapid process of attrition of non-county boroughs was taking place the Boundary Commission was sitting, and although non-county boroughs resented and resisted the transfer of their functions, at any rate while the Boundary Commission was sitting, there was hope that when it reported the various anomalies that had been created would be rectified.

But the Boundary Commission Report has been shelved, apparently indefinitely, and it is quite impossible for the House to expect the large non-county boroughs to tolerate, or at any rate accept willingly, the loss of functions which they themselves were performing efficiently and which they now know, to their cost, are being hampered by the transfer to the county.

With the very strong resentment that exists in the non-county boroughs, the House must expect that the larger ones will continue to take the only steps that are open to them; that is, to apply to the House for county borough status. That is the only way in which they can regain the functions they have lost, and I think the House should pause before it says, in effect, to non-county boroughs, "No matter what your size, no matter what your case, we shall turn it down without allowing it to go to the Committee for careful and detailed examination."

I know very little about Ealing. I will not go so far as to say that I am unconcerned about Ealing, but when the hon. Member for Ealing, South, was speaking he said a number of things that struck home very closely to me, as the Member for Chesterfield. He gave examples of intolerable delay. In Chesterfield we claim to be a highly efficient local authority. There are few authorities of any size whatsoever that had a higher status in education than Chesterfield; yet we are constantly experiencing the troubles and delay of frustration and inefficiency. It takes months to get a decision even upon details and on very small points which would have been decided forthwith before the services were transferred.

Taking the broad, general case—I do not say that it applies to Middlesex—counties can frequently be very bad administrative units. I am not now referring to the efficiency of all counties; they vary enormously and, on the whole, they are far more inefficient than the urban areas; but they can be bad administrative units because of their size and also because in these large areas there is very frequently no community of interest between one part and another. That is particularly the case where there is a mixture of urban and rural populations.

Perhaps the most striking example of lack of community of interest is a Lancashire non-county borough—Stretford. Stretford is right in the south of Lancashire; in fact, it is right in the middle of the Manchester conurbation; but because it is a non-county borough many of its services have been transferred to the county of Lancashire, which stretches nearly 100 miles from Stretford, right up into the Lake District. There is no possible community of interest there. It is fantastic that Stretford should find its services transferred to a county authority from which it is shut off by the expansion of Manchester.

It seems to me ridiculous to impose upon efficient urban areas the inefficiency of county administration and then refuse them the right to apply to have their case heard by a Committee which can go into details.

Does the hon. Member know that the County of Middlesex is completely urban?

I am arguing the general case why the House should pass these Bills of non-county boroughs so that they may go to the Committee. I am not arguing the case of Ealing; I am arguing the general case, which involves Ealing.

If we are to have a large scheme of local government reform, or even if Middlesex as a unit were to be considered, the case for this Bill might be weakened; but at present there is no prospect whatsoever of local government reform along the lines of the Boundary Commission Report. If we refuse a Second Reading to this Bill what we do is tell the non-county boroughs that even if they have a good case they cannot have it heard before a Committee and that there is no possibility of escape from the dead hand of county administration.

8.20 p.m.

With one remark made by the hon. Member for Southall (Mr. Pargiter) in his speech opposing the Second Reading, I, and I think most hon. Members, in whatever part of the House they may sit, entirely agree—that it would be unwise and, I suggest, undignified if this House were to give the Bill a Second Reading and then try and kill it in Committee. A well-known Member of this House many years ago—and I forget who it was—said of a Measure he did not like, "Take it upstairs and cut its dirty throat." I suggest that that treatment would be quite inappropriate to a Measure of this kind, which as the hon. Member for Chesterfield (Mr. Benson) has said, raises some acute issues relating to local government as a whole.

I want to deal with some of the arguments which were advanced by the hon. Member for Southall, particularly those which apply to Ealing, and which are occasionally put forward on debates of this kind. I hope the hon. Member for Chesterfield will forgive me if I do not follow him on the somewhat broad plane which he has been traversing, for I want to relate my remarks more closely to Ealing, although I may say that I entirely agree with what he said.

May I make my own position clear? I am a county Member; I sit for a county seat in this House; but I feel, very strongly, personally, about the case for the non-county borough which has reached a size, as in the case of Ealing, where it feels it can be better than the county authority at the job of providing truly local government for those living within its borders. It is high time that this House made up its mind on the point.

The major objection which is always put forward on occasions like this, and particularly in the case of Middlesex, is that if one gives a Second Reading to such a Bill as this and sends it to Committee, that sets a very dangerous precedent. It is said that if we do that, then all sorts of other boroughs will at once make similar applications for county borough status. It was said by the hon. Member for Southall that if this Bill were approved, Ealing would be leading a sort of ugly rush by other boroughs and urban districts towards county borough and borough status within the county of Middlesex.

I do not understand that argument at all, because if everybody is so satisfied in the County of Middlesex with the wonderful service which that county council provides, and which is set out in some detail in its memorandum in opposition to the Bill, then it seems strange that these other local authorities should be eager to ask for county borough status.

I frankly admit that I do not know as much about it as does the hon. Member for Tottenham (Mr. Messer), but surely the point is that if a borough such as Ealing says it wants county borough status, then I should have thought that the other authorities, if they were highly satisfied with the kind of government which the county council was providing for them, would say to Ealing, "You may think so, but we are happy as we are and we prefer to stay as we are."

Let us assume, however, that the hon. Member for Southall is correct when he says that other authorities would follow Ealing. Let us assume that this Bill is given a Second Reading, that Ealing becomes a county borough and that all the other local authorities in the Middlesex County Council area make similar applications. What will happen? The hon. Member for Southall said it would be the end of Middlesex as a county council, and he pointed out that Ealing was very magnanimous in suggesting that the county council might still have some kind of truncated existence as a sewerage authority, as a fire authority, and so on.

When the point is made that Middlesex County Council will cease to exist except in that way, I must ask, "Why not?" I say quite frankly and sincerely. "Why not?" For what really useful purpose does this vast, sprawling, local authority exist? What service does it provide that could not equally conveniently and, I suggest, far better be provided by a number of more individual and more compact local authorities than the Middlesex County Council? That is the view I take. I do not see that there is anything which the county of Middlesex can do which the other local councils could not do on a far more satisfactory basis if they were given the power, and personally I cannot see that it would be fatal to Middlesex as a county if some other boroughs, if not all of them, followed the precedent of Ealing.

But if they do not, and if Ealing is the only one of these boroughs inside the Middlesex County Council area to take this step, and if all the remainder stayed as they are, I can imagine the Middlesex County Council being quite happy about the situation. Yet they say in their statement that if Ealing is allowed to leave, and Ealing alone, and if none of the others follow, that would be extremely detrimental to everybody inside the Middlesex County Council area. That raises a number of other arguments with which I should like to deal.

First of all, they say, "If you allow this you will be permitting the removal from the county council area of an extremely important slice of our rateable value." It was said by the hon. Member for Southall that an increased burden would fall on the ratepayers in the county council's district outside the Borough of Ealing. Let us look at the figures. My hon. Friend the Member for Ealing, South (Mr. Maude) quoted them.

The fact is that at the last convenient date, which is 1st April, 1951, the rateable value of the County of Middlesex was some £22,500,000. The rateable value of Ealing is just under £2 million. In other words, we have this dreadful situation: here is this unfortunate county council with this miserable figure of £22 million rateable value and here is this dreadful local authority coming along and proposing to take away this enormous slice of £2 million out of the rateable value. The argument is absurd; I suggest that it does not hold water at all.

As we have been told, apart from London, Middlesex has the largest population and the largest rateable value of any county. Even if we gave Ealing county borough status, and substracted it from Middlesex, the county would still have the largest population and the largest rateable value of any other county in this country except the county of London.

This is not the sort of case that we had in the last Parliament, in the Luton Bill and the Ilford Bill, for example, to which reference has been made tonight. Undoubtedly there was in those cases a strong argument for the opponents to the Bill who could say, "If you let this town be taken away from the county, you are taking the major part of our rateable value, and what will the remainder of the county do?"

My hon. and gallant Friend suggests that that was not true in the case of Ilford; it may not have been possible to put it quite so high as that, but at least that was the argument advanced in the case of Luton—that we should be taking away the major town in the county and that the rest would be in a very much worse position as a consquence, and that the other ratepayers would suffer enormously. But in any event, I do not think the argument applies in this case, because, as I have indicated from the figures, it does not appear that Middlesex County Council will really suffer, or that the ratepayers of Middlesex as a whole will suffer, if Ealing is allowed to leave the county in this way. I think the Middlesex County Council would quite easily carry on, wave goodbye and say, "Wayward sister, depart in peace."

There is another argument. It is said that if we agree to the Second Reading of the Bill, we shall prejudge the whole local government issue. It is said that sooner or later some Government will make an announcement about local government reform in this country and that until that time nothing should be done to disturb this frozen pattern of local government. That is not progressive.

I have no doubt that it will be some time before the Government have an opportunity, or the Parliamentary time, to introduce a Measure of comprehensive local government reform. The last Government had six years, and they did not do it. They had many urgent and important portant problems to deal with, and so have we. I feel that it would be a very bad and retrograde step for us to stand pat, where we are, without making any adjustments to the great machine of local government in the country. It is very unlikely that we shall have an early opportunity of re-organising the machine, and I feel that these interim adjustments are necessary.

"But then," say the critics of the Bill, "even if we grant all that, you are prejudging the issue by allowing this one borough to achieve county borough status." I do not think that is the case with Ealing. I do not think that we prejudge the whole general question as to which boroughs should be allowed county borough status, if indeed county borough status is to be the ultimate solution.

This is a special case, I suggest, and I do feel that the case has peen made out overwhelmingly by my hon. Friend the Member for Ealing, South, and by the facts themselves as admitted in the various statements made by those who have petitioned against the Bill and those who have put it forward. I do feel that, particularly on this side of the House—I am not introducing a party point here—but on this side of the House we have a great and strong belief that local government should be local.

I know that hon. Members on the other side of the House feel very much the same about it. I would say as a final plea that Ealing here is asking for nothing more nor less than that. Ealing believes she knows best how to run her own affairs. There may be some difficulties about technicalities—difficulties such as the hon. Gentleman the Member for Southall mentioned over health officers, education, and things like that; but they are merely technicalities. The basic issue of principle the House has to decide is, whether or not we are going to permit, in these special circumstances, the case for this particular local authority to be examined by an expert Committee of this House. I suggest that the case for that is made out, and I hope that hon. Members will give the Bill a Second Reading.

8.31 p.m.

Unlike my hon. Friend the Member for Chesterfield (Mr. Benson) I am concerned with Ealing when we are discussing a Bill promoted by the Ealing Corporation. I do ask hon. Members to realise that we are being asked to deal with a particular Bill dealing with a particular non-county borough situated in a particular county, and that the votes we give tonight, no matter how much we allow them to be swayed by our general view of this matter of county and county district government, will determine, to some extent, the future of Ealing, and, as far as our vote goes, no other district, and will, interfere, possibly, with the county of Middlesex, but with no other county. Therefore, we must give consideration to the special position of Ealing, no matter what our views may be on the general point.

Last week I voted for the West Hartlepool Bill—to the great annoyance of my hon. Friend the Member for Durham, North-West (Mr. Murray)—because it seemed to me that that was a Bill that ought to be examined upstairs. I was prepared to accept one proposition in it, but found great difficulty in dealing with the other proposition in it. What I was quite certain ought to happen was that Hartlepool ought to be allowed to reabsorb West Hartlepool—although that was not the way it was put in the Bill—because there is no doubt that those two local government areas form one community, and one moves from one to the other without knowing one has gone unless there happens to be on a street nameplate an indication whether one is in Hartlepool or West Hartlepool. When it came to the possible absorption into the county borough of part of the Stockton rural district I was not quite sure whether it ought to take place at all, or whether, if it did take place, the area asked for was the right area.

This kind of thing is the sort of thing that can be settled by a Committee upstairs. As far as I am concerned, if five of our colleagues—I think five serve on these Select Committees upstairs—having heard the case put up by the West Hartlepool Town Council and the Durham County Council and by the Stockton Rural District Council, reach a decision, after having heard, let us remember, learned counsel, and evidence given on oath—which we never get here.

I recollect that when I once presided at a petty sessions a lady took the oath with the words, "The evidence I shall give should be the truth" and that I had to ask her to read the words on the card. Undoubtedly, statements made in the House should be the truth; and I should get into trouble with you, Mr. Deputy-Speaker, if I asserted that any statement other than the truth was ever made by any Member of the present House. But the House has a long history.

However, if the Select Committee upstairs decides this question of how much of Stockton rural district should go into West Hartlepool, I imagine that those of us who do not serve on the Committee will say that our colleagues upstairs, having heard counsel, and evidence on oath, and having deliberated—and at least a high proportion of that small Select Committee has had considerable experience of dealing with this kind of legislation—were capable of making that decision, and that we should accept it.

I do not put this Bill into the same category. I put it into a very different category. I had a great deal of sympathy with Luton. In fact, the hon. Member for Luton (Dr. Hill), who was not then so exalted as he now is, was very kind in not quoting to me what I said in one of the Committees upstairs on the Police Act, when the case of Luton was put to me, and when I said that I wished that I could have as good a chance in the Derby as Luton had of becoming a county borough. As the case turned out, I did better on the Derby than Luton did with its county borough status.

Luton, after all, is an area which is surrounded by a very wide rural belt. One has no doubt when one is in Luton, and one has no doubt when one comes out of Luton to get into Bedford. That is not so with Ealing. Ealing is surrounded, as has been pointed out, by 10 other very popular districts. I think it was Lancelot Hogben in his "Mathematics for the Million" who said that if one had five colours on a map one could distinguish all of the areas adjacent. Middlesex is not a bit like that, to take Ealing out of the county is to do something which is very different from taking Luton out of Bedford or Chesterfield out of Derbyshire or Swindon out of Wiltshire. I give three cases at random where there is a non county borough sufficiently distinguished from the surrounding countryside to be an obvious, recognisable community.

I do not think that Ealing comes into that category. I am certain of this, that the local government of Middlesex, the local government of suburban Essex—by that I mean Ilford, Walthamstow, Romford, Leyton, Leytonstone, and that group of non county boroughs—

West Ham and East Ham are existing county boroughs. I was talking about suburban Essex, and I am quite sure that the hon. and learned Gentleman, who represents suburban Essex, would not like it to be thought that West Ham is really part of suburban Essex.

I was reminding the right hon. Gentleman of the existence of East Ham as well.

If we only go a little further west from West Ham we get into Stepney and Poplar. I was talking about suburban Essex, which is a very similar case to that of Middlesex.

I do not believe—and here perhaps I may relieve some of the anxieties of the Minister, the right hon. Member for Bromley (Mr. H. Macmillan)—that quite the same considerations apply to suburban Kent and suburban Surrey. They have not quite reached the stage of mass development that has taken place in Middlesex and in suburban Essex. I think that those two districts present a problem which is not to be found—and, after all, I have given some little time to local government myself, and have served in two offices in which local government cropped up frequently—anywhere else in the country; there is not the same problem to the organisers of local government as in those two areas, and I do not think they are matters which can be dealt with piecemeal.

I say quite frankly that I think they are urgent. It was a matter of great regret to me personally that in the six years that I was in office we were unable to deal with this matter, and I am quite prepared to accept any scoffs that are made—although they have not been made yet, and may not be—because we did not deal with it. I am trying tonight to deal with this Bill as objectively as I possibly can.

I am certain that any commission which may be appointed to deal with the local government of England and Wales as a whole will either have to have specific terms of reference with regard to these two suburban districts or will have them excluded from its terms of reference and a separate commission will be appointed to deal with them, for they do not fall into the general consideration that can be given to the rest of the country.

This will be a free vote as far as this side of the House is concerned. There was a complaint last night that a three-line Whip had been issued to hon. Members opposite, and I assured the hon. Gentleman who made the complaint that I had no desire that he should have a three-line Whip inflicted on him. I imagine this is a free vote on both sides of the House, and I hope that on these Bills we give our votes in accordance with the way the weight of the argument appeals to us. I merely say that, in contradistinction to the vote I gave last week I propose on this occasion to go into the Lobby against this Bill for the reasons I have given.

Perhaps I may just be allowed to say one or two words about the general issues that arise. Here I speak for myself alone and cannot be taken as binding anyone other than myself. My own view is that we shall never get a sound review of local government until this House settles what are county and what are county district functions. That has never been done, with the consequence that some very small ancient non-county boroughs have powers with which no small authority ought to be invested. If we could only get set out—and this is a matter for the House and not for a Royal Commission—what is a county and what is a county district function, then I think we could ask a Royal Commission to map England and Wales into new counties and county boroughs on the basis of that decision.

Then, when one went into a county district area one would know the functions that the county district council discharged, and not find that one was in some ancient borough, which, because it had a population of 10,000 in the early days of the 19th century, now had powers which are not vested in populous non-county boroughs like Chesterfield or Luton because they have grown up since the days when this power was given to the very old corporations. That is the first step, to settle the functions.

Then let us have a Royal Commission to settle what the new counties and the new county boroughs should be. Then take a third step and have in each of the new counties one of the commissioners sitting with local assessors to divide the new county in county districts. As one who took part in the dividing of a county into county districts under the 1929 Act for the review of districts, I think it is astonishing how much log-rolling there is between county councillors, who say "If I vote for your county district to remain exactly as it is, will you vote for my county district also not to be interfered with, no matter how strong the argument in the case may be?" Let me reiterate that I am not speaking for anyone other than myself.

I should have thought, contrary to the view generally held, that in a House in which the Members are fairly evenly divided, one of the things we might do would be to have a Select Committee of the House—this is my personal suggestion and must not be taken to bind anyone else—which might very well consider the first of these three stages. This Committee, being a Select Committee, would be almost evenly divided between the parties for a start. This is a matter which cuts across party lines, and it would be astonishing to find in the official report of such a Select Committee how the divisions had taken place and how the official decision had been supported. We might get on with that stage so that we could have a rational development of this system.

Because I think Middlesex and suburban Essex present so urgent a problem, I hope that something might be done, even during the course of this Parliament, to see whether we cannot get an arrangement by which a new method of solving their problems could be discovered. I am certain that these big urban populations, where they are closely congregated together, need urgent attention.

The greatest man that my native county ever produced, and a former Member of this House, William Cobbett, said, of Middlesex, "All Middlesex is ugly." I have travelled about modern Middlesex and found that part of the work of the Middlesex County Council has been to preserve a great many beauties that Cobbett never discovered, but I am quite certain that the local government map of Middlesex is the ugliest and the most difficult of all the local government maps of England.

8.50 p.m.

This is, I think, the third or fourth occasion on which this House has had to consider a Bill of this character. Tonight I should like to make one or two general observations upon the subject matter of the Bill, and I will endeavour not to allow myself to be unduly influenced by the fact that I hope that before long I may be in the same situation as my hon. Friend the Member for Ealing, South (Mr. Maude) in moving another Bill for county borough powers for my own Borough of Ilford.

I listened, as I am sure the whole House listened, with particular interest to the speech that has just been made by the right hon. Member for South Shields (Mr. Ede). When he began his speech, I hoped that I should be able to agree with all that he was to say. Up to a point I have been able to agree with much of what the right hon. Gentleman said, particularly with his observations at the conclusion of his speech. But the right hon. Gentleman, I feel, did not do himself justice in explaining to the House why he is going to vote against this Bill. He began by saying that the House has to consider in this Bill the particular situation of Ealing and the particular situation of Middlesex. This Bill has certainly shown that there is a wide difference of opinion about the consequences on Middlesex of creating a new county borough there.

I should have thought, speaking for myself, that that was not a question with which this House ought to deal upon a Second Reading debate. It is, I would suggest to the House, a more fitting subject for the decision of a Committee upstairs which will have the advantage, as the right hon. Gentleman reminded us, of hearing evidence given in a certain way, both of representatives of the parties concerned and of those experts whose assistance is usually invoked on an occasion of this sort. It is very desirable that evidence of that sort should be available to those who have to make a final determination upon the merits or otherwise of the Bill. The Committee upstairs is in possession of knowledge of all these particular matters upon which a proper decision on this question ought to rest. It is in possession of the facts to an extent and in a manner which this House on the Second Reading of the Bill can never be.

I think that it was the hon. Member for Southall (Mr. Pargiter) who said that the Committee upstairs would have to disregard the effect of this Bill on the County of Middlesex. I should have thought that was precisely one of the matters which the Committee would have to consider. I hope that the House will give this Bill a Second Reading. Let it go upstairs, as I invited the House to allow the Ilford Bill to go upstairs, where it can be decided on its merits, and where the Middlesex County Council will have abundant opportunity, with the assistance of their advisers, of placing before the Committee all the reasons why the Bill should be rejected which they cannot place before this House in a Second Reading debate.

If the House will bear with me, I should like to make one or two observations of a more general character. The right hon. Gentleman said that he drew a distinction between a local authority situated like the Borough of Luton and the position which exists in suburban Essex and in Middlesex. I should like to ask the right hon. Gentleman this question: What future does he envisage for these great new authorities which have come into being in Greater London in the last 30 years?

I submit that by allowing places of the size of Ealing, Ilford and similar communities to remain in an administrative county, a more serious disruption of local administration will eventually be caused than will be brought about if greater responsibility is given to these authorities now. Some greater measure of responsibility must eventually be given to places of this size and character than they enjoy at present.

In reply to the hon. and learned Gentleman's question about what future I envisage for these places, I think they should be made into urban authorities. But as they are one continuous mass, the two groups which I chose should be considered individually and as a whole, and the exact boundaries between them, or the possibility of having one authority to deal with the whole of them, with delegated powers to smaller units, would be matters upon which I should like to get the advice of an expert committee sitting to consider them.

I am very grateful to the right hon. Gentleman for giving me an answer to my question. Needless to say, the answer does not satisfy me.

The difficulty about the right hon. Gentleman's solution may be found in the fact that these communities are already separate communities.

The right hon. Gentleman shakes his head. Apparently he and I will not agree about that. If he will come with me one day to the borough I represent, I will endeavour to satisfy him that Ilford, in the 26 years that it has existed, has become a separate community with a municipal life and a civic pride of its own. That is something which is worth having, and I hope that the House will not wish to do anything which is likely to destroy it.

The question I really wanted to put to the right hon. Gentleman was: Does he envisage that these great authorities will receive more responsibility under the reorganisation of local government, or less responsibility? His answer may be that he envisages that they will be reorganised altogether, but, if we exclude that, are we to consider that places of the size of Ealing are to be given more responsibility when reorganisation comes or less?

I think that we cannot escape the conclusion that they will be given a wider responsibility than they possess now. If that is the answer, I say that there will be a much greater disruption of the administration of local government if they are retained within an administrative county now than would be the case if they are offered now a greater measure of independence than they enjoy at present.

Take the education service. In Middlesex, Essex, and the other counties which contain large suburban local authorities, the administration of education is gradually being built up on the basis that the county is the education authority. In any reorganisation of local government, education is one of the services which will have to go back to those great new county districts. If that is so, is it not better that, before the administration has been built up on a county basis, it should be encouraged now to grow up on the basis of the administration of the large county districts?

What I have said about education I believe to be true of the personal health services and of town planning. I would remind the House that the Boundary Commissioners recommended in their Report that those three services should be transferred from county administration to the administration of a county district authority, to which they gave a new name and a new status.

One or two hon. Members have opposed the Bill upon the ground that Ealing is part of Greater London. Indeed, I think that the argument of the right hon. Gentleman proceeded along those lines. I hope that that argument will not be accepted by the House. There are very good reasons why we should not be unduly influenced by the fact that Ealing forms part of Greater London.

The first reason is that the municipal boroughs in Greater London have, in a very short time, built up an enviable tradition of local administration—I do not think that anyone in any part of the House would challenge that statement—and a municipal patriotism which is a very valuable thing and a quality which this House should do its best to encourage. The mere fact that these Bills are brought forward year after year is some evidence of the existence of that civic pride which this House should make it its purpose to encourage. Local patriotism is a good thing. Let us do what we can to encourage it.

The administration of these boroughs attracts the greatest measure of public interest. I will undertake to say that the local elections which are to take place in Ealing in the next few weeks will arouse a greater measure of interest among the population than the elections which will take place there for the Middlesex County Council.

The government of London in my judgment is not capable of any comprehensive treatment. There are deep-seated differences between local government in the administrative county and local government outside the administrative county. They are differences which cannot be conveniently assimilated. What the form of administration should be in London we cannot discuss on this Bill. The fact that places like Ealing at present form part of the great conurbation of London ought not to be an argument against the existence of all-purpose authorities in the Metropolitan area.

For these reasons, I hope this Bill will receive a Second Reading tonight.

9.6 p.m.

This debate has been, for me at any rate, an interesting one, and has formed a rather agreeable interlude in that sometimes tedious sequence of purely political partisan debates on which we spend so much of our lives. It has been very well argued on both sides, and the case has been fully and amply deployed.

The arguments in favour of the Second Reading of the Bill are simple, clear and practical, and no one can deny their cogency. They were admirably presented in a speech of quite remarkable skill by the hon. Member for Ealing, South (Mr. Maude). So far as its population is concerned, its size, its record as a local government authority, and the capabilities of its council, I have no doubt that Ealing can establish a strong claim to county borough status.

It is quite true that there has been for a long time a series of barriers against the passage of Bills of this kind, and this was in turn defended, as I think the promoters of the Bill argued, by considerations, some of which do not now apply. Of course, for a time a reason given for delay was the transfer of responsibility to the Boundary Commission. That Commission has now been dissolved, and thus, after the dissolution of that body, the reason given was another one which was also used as a barrier—the prospect that a broad measure of local government reform would shortly be put before Parliament.

I am not putting it in any partisan way when I say that six years have passed and two administrations, one with a large majority and one with a small one, and no such plan has emerged. How then, would the promoters of the Bill argue, can one continue to resist the claim of Ealing and of boroughs similarly placed? Nor is it certain, so they would urge, that if such a review were completed, the proposals which would follow from it would give to this borough or to others similarly placed, powers and functions very different from those which are now proposed to be given in this Bill?

In other words, they might say, the final result of local government reform would be very much what is proposed in this Bill. Therefore, they would argue, and with a good deal of force, that they had been delayed, partly ingenuously by those who believed that it was possible in the turmoil and confusion and the manifold problems of post-war to introduce a large measure of local government reform, and partly disingenuously by those who used the prospect of such a reform as a convenient instrument to delay action which they disliked on other grounds. That is the argument for the Bill, and I hope that I have summed it up fairly.

On the other side, an equally powerful argument was deployed against it by the mover of the Amendment, the hon. Member for Southall (Mr. Pargiter), and by the seconder, the hon. Member for Wood Green (Mr. Irving), whose speech might serve as a model. This argument is that, quite apart from any question of local government reform, Parliament has long been unwilling, or, at any rate, hesitant, to allow boroughs to opt themselves out of the county, so to speak, if the effect upon the county was likely to be damaging or disastrous. These were the arguments which, quite apart from any question of reform, have many times, as the right hon. Member for South Shields (Mr. Ede) will remember, and for many years, been used in the House.

The transformation from what has hitherto been a county town—that was very often the case—into a county borough and the subsequent effect upon the life of the surrounding community, has often been the compelling reason—I can remember one instance a few years ago—why county borough status has been refused by the House. Moreover, in this case, so the argument now runs, if the Bill were to pass, it would be very difficult—indeed, impossible—to resist similar claims from the neighbours of the borough in question.

Anyone who studies the map will see the cogency of that argument. Boroughs A, B, C, D, E and F would all present precisely the same claim, and the result upon the County of Middlesex would not only be damaging; it would be fateful. In fact, for all except sewerage and, more important, cricketing purposes, the County of Middlesex would cease to exist.

The opponents could go on to argue that it would be difficult to refuse other claims in counties where the blow might not be so mortal. But then, they could even urge that the extinction that would fall upon Middlesex would, perhaps, be a less painful operation than the draining away of its lifeblood that might come to counties like Cambridge or Bedford, just as sudden death may often be preferable to a long drawn out illness. Finally, the opponents repeat the argument that however long the process of reform may take, and however great the difficulties and even the hardships caused by waiting for it, there must ultimately be a large-scale revision of the whole structure of local government.

Why, then, it is argued, take this premature action? Why introduce new and unnecessary difficulties, and why do so—although this argument has not been deployed tonight, it has certainly been present in my mind—at this present time, when it is believed that negotiations are taking place, and not altogether without prospect of success, between the various groups of local authority interests with a view to reaching some agreed solution?

That more or less represents fairly the arguments which have been put forward by both sides, and now the House will expect me to sum up my own judgment in which direction the scale should incline. In a sense, I shall have to disappoint hon. Members, for I think that I should better serve the House if I were to give some information more of a factual character, which may or may not affect its judgment.

In the first place, I do not think it is quite the fact that if the Second Reading of the Bill is passed, it would be the duty of the Private Bill Committee to do anything except to hear arguments about the effect upon Ealing and upon Middlesex. It would be quite improper for them, as far as I know the rules and procedure of the House of Commons, to enter into a lot of evidence as to what would happen in other boroughs, like Harrow, Hendon, and all the rest of them, or what action they might or might not take. I think that they would be carrying out their functions only if they stuck to what the Bill was about and what would be the effect upon Ealing and Middlesex. I only try to give that advice objectively to the House, because I do not think we can, as it were—if I may use a colloquialism—"pass the buck" to the Committee. We must decide on the Second Reading whether we want this done now or not.

That is on the principle of the Bill, and the other question is about local government reform. There will be no local government reform in this year's legislative programme.

I am bound to believe that unless there is a substantial measure of agreement between the interests—which is not impossible—I do not see any prospect of introducing it in 1953.

Would the right hon. Gentleman give some indication of what he means by some measure of agreement between the authorities concerned? Something in the nature of an agreed revision of existing powers?

I was going to take up the very helpful hint of the right hon. Gentleman, the growth of some general principles as to what the functions and powers of different authorities should be, and I think that will help a lot. Even so, there are many other Measures with which we have to deal, and I do not hold out very great hopes, but I should like very much and I hope very much to present some such Measure in the course of this Parliament. From my own point of view, naturally, it would be an ambition anyone might reasonably feel he had some contribution to make. I therefore hope it, but cannot promise it.

I do not think the public always realise the narrow scope of legislation in this House, especially when Governments exist with small majorities and where highly contentious legislation can hardly be taken except on the Floor of the House of Commons. Even non-contentious legislation can take almost as much time, sometimes more. If, therefore, the argument as to the imminence of local government reform were regarded by hon. Members as a vital factor in coming to a decision, I think I ought to be frank with them. It is in our hope, it is in our ambition, but I cannot promise that we shall be in a position to fulfil it. I think that is a frank statement.

Having said that, I add that I think the vote will be, in the strictest sense of the word, a free vote. I do not myself approve of that intermediate system in which a vote is called a free vote and in which I have known Ministers to use a good many private and informal methods of influencing hon. Members and the Whips to use their functions not officially but effectively. This House should decide, after hearing the argument, and I should not regard any vote given for or against the Bill as being for or against the Government just as the right hon. Gentleman claimed he was in the same position regarding his party.

As a personal view, I represent a non-county borough and I have represented a non-county borough during the whole of my political life of more than 25 years, first that of Stockton and now that of Bromley. I am very well acquainted with the grievances as well as the ambitions—well stated tonight—which very often such municipal corporations have. At the same time, I am well aware of the doubts and apprehensions of the county councils and I realise the difficulties of this particular case. Yet, if this Bill is passed, I cannot really pretend that a large number of other Bills will not very rapidly follow.

I am afraid then that the position might become untenable and a kind of bastard reform of the whole structure might be forced upon us piecemeal, perhaps under unsuitable conditions. For, let us face it, many difficulties may lie before our country, when our minds will not perhaps be ready to give grave attention to these matters, and with the proper preparation.

The right hon. Member for South Shields (Mr. Ede), and I am grateful to him, made certain suggestions which I will study carefully, both for what he said and for his experience and for the way they were put forward. I think that large reforms, or large measures, or large issues should rest on the strength of Governmental decisions and should be carried out as part of a general plan. Therefore, I should be sorry to see a kind of slide into a confused position, if there is any chance still of carrying out a well thought out and careful advance. For these reasons, I shall cast my vote in this Division against the Second Reading of this Bill.

9.21 p.m.

Everyone who has sat through this debate will agree that it has been worth while. I should like to congratulate the hon. Member for Ealing, South (Mr. Maude) on having stated a difficult case in a convincing manner. If he left out things he might have said, he left them out because they would have damaged that case. None the less, he made the best of the material he had. Although a humble back bencher, I feel I can extend to the Minister my appreciation of the statesmanlike manner in which he submitted to the House what is, in effect, the true position.

I could not reconcile the speech of the hon. Member for Henley (Mr. Hay). I always enjoy his speeches. He has a nice speaking voice. He has a clarity of enunciation which leaves no room for ambiguity. I did not hear quite so clearly all that the hon. and learned Member for Ilford, North (Sir G. Hutchinson) said. But in the speech of the hon. Member for Henley there were certain references which I found it difficult to reconcile. He said that if this Bill goes upstairs to a Committee, it does not prejudice the question of the other boroughs. Of course, he meant us to learn from that that Ealing could get county borough status without there being any danger of other boroughs following that line. Then, in a remarkable sentence, he later said that if Middlesex as a county council went out of existence, what did it matter?

Those of us who know our London hate its terrible urban spread. If it has done nothing else to justify remaining in existence, the Middlesex County Council has created a wonderful green belt which has prevented that urban spread getting right out of hand. The hon. Member said we might leave the county council with nothing but sewerage powers. Well, I was in the House in 1929 when a Bill was introduced by the county council which was responsible for the finest engineering works in Europe, the Mogden sewerage works, the West Middlesex drainage scheme. If hon Members care to go there they will find illumination by the gas made on the spot, methane gas. They will find motor vehicles with no other motive power than that generated on the spot by methane gas. That could never have been done by any county borough.

What I am trying to stress is that if this Bill goes upstairs, and if it succeeds, it is bound to be followed by no fewer than 11 other boroughs and urban districts asking for similar treatment. If it succeeds, we could not deny them the right of becoming county boroughs also. In other words, we shall be destroying the two-tier system.

I felt tonight that this debate was being conducted on the lines of the prejudice of those who support the all-purpose authority and those who support the county authority. I do not support either of those authorities. I have said for years, and I believe it, that we must have reform of local government. The position is really chaotic, and I think we can start in Middlesex.

The county council has agreed, and not under the threat of this Bill—it has been in the air for a long time—to hold a conference with all the local authorities and, at that conference, to reach agreement on what the minor authorities should do. I confess that authorities like Ealing, Harrow, Willesden, Edmonton, Tottenham and Hendon can quite easily do more than they are doing and are entrusted to do at the present time. They all ought to have more power. But that does not mean that by giving county borough status to a few of them we accomplish all that is required.

We cannot escape the fact that there must be one authority big enough to plan for a wide area. There must be an authority big enough, when a population is divided up into its special categories and types, to deal with those special categories and types. Then the day-to-day administration of the service should devolve on the smaller authorities.

If there is no system of that description, then there can be no over-all planning authority, no big authority to deal with the mechanistic side of the social services. We ought to have agreement as to what these important authorities can do very much better than the county authorities.

But it is not merely a mechanical efficiency that is required. When we are dealing with these personal social services something more than mere cleverness is wanted. There are those qualities which are associated only with those who are, as it were, at the point of contact with the people. Therefore, the responsibility to carry out what can be described as the human services—health, maternity, welfare, and all those sort of things—should rest on the shoulders of those authorities.

But it is not likely that we are to get any reform of local government in a comprehensive way, and, when we do, we shall have to consider a county like Middlesex as something exceptional. There is not another county in the country like it. It is completely urbanised, and is the only county which is completely within the Metropolitan Police area.

London already has special powers and a special Act of Parliament, which, in point of fact, proves very definitely that there is need for review. I do not like the London system; it is over-centralised. That is not the system I am looking at for Middlesex. I want something better than that because, I repeat. Middlesex is unique.

I want to touch upon one or two things contained in this Bill. Perhaps I ought to refer to the claim that has been made so often in debates of this kind. It is, "Let the House of Commons give the Bill a Second Reading and send it upstairs. We only want to consider this in principle and the Committee, who will go into detail, will be the body that will best judge whether or not this matter should proceed."

But Second Reading is something more than consideration of a principle. We have a right, on Second Reading, to consider the content of a Bill. I listened to the hon. Member for Ealing, South, when he was saying what a wonderfully efficient borough Ealing is: but I am not so sure. For instance, Ealing was responsible in 1950 for building 79 houses. In 1951 the figure went up to 111—the lowest figure in the whole county. Acton, which has a population of only 68,000, built 224 houses. Staines, with a population of 21,000, built 500 houses.

Let us look at the possibility of improvement in the services if Ealing becomes a county borough. The present technical school there does not provide training in engineering and, therefore, their engineering students would have to go outside the county borough to receive technical education of that character. If we take the county there are technical schools to which Ealing children can go. There is in Hornsey one of the finest art schools. At present students from Ealing can go to that school.

Ealing children can now go to Southall and to other boroughs, for secondary schools, technical schools, grammar schools and, of course, county schools are open to the population of any part of the county. By becoming a county borough Ealing will lessen the opportunity of their children receiving as good an education as they can receive at present. It was not for nothing that in 1944 the Education Act provided for this system whereby the county is the education authority.

I am prepared to agree that there are possibilities of there being modifications in the working of that Act, which could improve it and could give to municipalities greater authority than they have at present. But that is not justified by Ealing in any way at all. There has been no case made out for Ealing having borough status without it being shown that it is bound to do damage to certain other boroughs.

I would refer to the fact that Middlesex has a rateable value of £22 million and Ealing has a rateable value of over £1,900,000. Those figures are not important. What is important is that if we truncate the county and, in consequence, weaken its opportunity to do the work that it can do, we shall be doing harm to local government generally.

I hope that this Bill will not go upstairs. I hope that we shall benefit from this debate by persuading the Government to set up a committee to investigate and inquire into the prospects of changes in local government so that, if we cannot get what some of us have been hoping for for years—a major measure of reform—at least we can get such alterations as will deal with the anomalies which, at the present time, mean that we do not get the best either out of the people who are prepared to serve or those who are served.

9.37 p.m.

I am very conscious of the special responsibility which devolves upon me tonight in winding up the case for the Ealing Corporation—a borough which is similar in many respects to the borough I represent in this House. I always listen with very great interest, and indeed pleasure, to the hon. Member for Tottenham (Mr. Messer) on the subject of local government; but I am afraid that I have listened now for three years in a row to virtually the same speech dealing with the same problem.

In the last two years he was a Member of the party in power. There are many hon. Members on the opposite side of the House who have expressed very considerable feelings in regard to local government, but over the years they appear to have had no influence whatsoever on their right hon. Friends when they were able to do something about local government reform.

I want to make one point in answer to the hon. Member for Tottenham on the subject of Ealing's housing abilities. I think I must correct his statement straight away. He quoted some figures which would appear to indicate that Ealing was a very backward housing authority. In point of fact, up to 31st December, 1951, Ealing Corporation had been responsible for the erection of no fewer than 2,279 houses. [HON. MEMBERS: "Since when?"] Since the end of the war. At one period they were top of the Minister of Health's housing league table for houses built by non-county boroughs since the end of the war. At present they maintain a position second on the list, and I must tell the hon. Member for Tottenham that the non-county borough which is now on top is the borough represented by my hon. and learned Friend and myself, namely, Ilford. Both Ilford and Ealing have Conservative councils, which would appear to indicate that, notwithstanding the great difficulties under which we labour, we have been able to build houses rather more quickly than Socialist-dominated councils.

The hon. Gentleman says I have misquoted, and to prove that I have misquoted he says that my figure of 111 houses for 1951 is wrong because Ealing has built 2,000 houses since the end of the war. Will he tell me how many houses Ealing have built in 1951?

I did not say the hon. Member had misquoted, I said that he had misled the House, and I repeat that. On another occasion, my right hon. Friend the Prime Minister said that one cannot get away from arithmetic, and the facts are that since the end of the war no fewer than 2,279 houses have been built by the Ealing Corporation. That is not important, however; nor is it relevant to the issue before us.

Hon. Members on all sides of the House, not only tonight but on other occasions, have expressed a desire for the reform of local government. This unanimity of desire has found expression through three Parliaments. What prevents us from taking the necessary steps? In the past, the narrowness of Government majorities has been the determining factor. Nevertheless, when one listens to speeches from both sides of the House, one sees a surprising degree of unanimity which, I think, would find a majority in the House for a major reform.

What we have to fight against is the insistent and persistent desire of the county councils to retain their powers, which they have obtained over a number of years. It is not often that I agree with the right hon. Member for Ebbw Vale (Mr. Bevan), but on one occasion he said something with which I found myself in complete agreement. He said that the local interest must be preserved in local government—and I quote from the OFFICIAL REPORT, 2nd November, 1949, col. 517:
"There are some things to which that test is not entirely applicable. The citizens of any of our great communities require an emotional identification with something which is smaller and more immediate than that of the nation itself. Local government is a part of the emotional, spiritual and aesthetic equipment of modern society, and, therefore, it is something to which we cannot only apply the test of efficiency, because if we apply that test to the ends of life as well as to the means of life, then we have a soulless and stereotyped community."—[OFFICIAL REPORT, 2nd November, 1949; Vol. 469, c. 517.]
When I read that I thought it was the classic answer to Socialism in our time.

For years the struggle has gone on between county districts and county councils. I say quite frankly, in order to make my position quite clear, that I am strongly opposed to the entrenched position of the county councils in this country. I believe that experience shows, irrespective of the party which controls them at any one time, that they are inefficient in the way they administer the affairs of our country. [HON. MEMBERS: "Nonsense."] Immediately we see county Members eager to defend this entrenched position, and I do not blame them for that at all. We must remember that counties generally are a mixture of both urban and rural over their large areas, and the local part of administration is no longer there.

It is quite wrong to say that we cannot reform local government at present. As was pointed out by the hon. Member for Chesterfield (Mr. Benson), in fact there has been a very considerable reformation of local government since 1945, and very substantial functions and powers have been taken away from the smaller authorities and given to the larger authorities. Was there ever a voice raised in the House by any Member of a county division protesting against these new powers being given to the counties? [HON. MEMBERS: "Yes."] Well, if there were such voices I must say they were rather sotto voce.

It may be that I have but just come to this House, but I have been able to read for a long time. I am not convinced that there is any real desire on the part of the county councils to have any major reform of local government. Indeed, if we quote from the petition of the Middlesex County Council against the Bill, we see in paragraph 6:

"In the opinion of the County Council there is no necessity to make any change in the local government of Middlesex."
The Council goes on:
"Manifestly, if a change is proposed, the subject must be dealt with as a whole."
I should like hon. Gentlemen to read very carefully through this petition and the petitions which have been submitted in other cases—by Essex County Council when Ilford put forward its Bill, and by Bedfordshire County Council when Luton put forward its Bill. Perhaps not unnaturally, the case is always weighted in favour of the county council. There is always talk about the harm—or the alleged harm—that will be done to the county council. There is never any suggestion of the benefits that will accrue to the local authority which is seeking to acquire an improvement in its status. That, surely, is a not inconsiderable point to bear in mind in these cases.

It has been proved over and over again that, by the granting of county borough status to those boroughs that apply, for it, and can prove that they can provide service in a more efficient manner than they have been doing, something of great benefit to the future social life of our country is done.

We seek tonight to infuse new life and virility into our local government service, to give the aldermen and councillors of this very large and progressive borough a new sense of mission and greater responsibility, to provide for the local ratepayers greater and closer control over their own affairs. I have said on previous occasions, and when supporting the Ilford Corporation Bill, that local government is both the foundation and the pillar of our democratic way of life; and to allow local power to diminish can only strike at the very roots of our society. Tonight the House has a real chance to rebuild this service.

I wish to quote again the right hon. Gentleman the Member for Ebbw Vale. It has been suggested time and time again that something is being done which should not be done—that we are trying to jump the queue, to get in front of any reform of local government which may ultimately take place. I should like to point out that when the right hon. Gentleman the Member for Ebbw Vale had some responsibility for the affairs of this country he made a statement in this House in which he announced the winding-up of the Boundary Commission, and, when he was pressed by a former Member for Luton on what was the position of local authorities, and on how they were to secure some improvement in their status, he said:
"Local authorities themselves should decide whether to proceed with Private Bill legislation. Where local authorities think they ought to have immediate easement, I think they ought to proceed by Private Bill procedure at once, and, where easement is necessary, we will give facilities."—[OFFICIAL REPORT, 27th June, 1949; Vol. 466, c. 761.]
The next thing was that some four months later the right hon. Gentleman came down to the House and made another statement which was completely at variance with the one he had previously made in the House.

If the hon. Gentleman will bear with me a little I will tell him. The right hon. Gentleman said on 2nd November, 1949:

"But we are not prepared to support proposals which are so far-reaching in their character as to make changes that might obviously have to be assimilated in the changes that the Government themselves will propose."—[OFFICIAL REPORT, 2nd November, 1949;Vol. 469, c. 517.]

It was so completely at variance that it had a very extraordinary effect on the hon. Member for Coventry, East (Mr. Crossman), who on the first occasion supported his right hon. Friend in the Division Lobby, because he felt that his right hon. Friend meant what he said, that there was to be some reform of local Government.

The hon. Gentleman really ought not to interrupt. He has not been present at the debate for very long, which has now lasted nearly three hours.

When the hon. Member for Coventry, East, discovered that his right hon. Friend did not mean there was to be any reform, and that there was no likelihood of it, he expressed his displeasure and went into the Division Lobby in support of the Luton Corporation Bill on the second occasion. Now, of course, the chums have got together again, and I suppose that rift has been healed.

The point is that we have got to a stage in the government of this country where we can no longer dilly-dally with the question of local government reform. We have heard from my right hon. Friend that within the life of this Parliament he hopes to make some proposal for such reform. Hon. Gentlemen opposite have expressed themselves in some sort of amazement about that, but I would remind them that this Parliament does not end until October, 1956, so that my right hon. Friend has got some months of elbow room in which to bring forward these necessary reforms.

I therefore feel that, strong as are the arguments for refusing to give this Bill a Second Reading, on balance the arguments on the other side are equally strong. I think that tonight the House should express itself positively, give this Bill a Second Reading and allow detailed consideration of these proposals. I am sure that that will be of considerable help to my right hon. Friend. I concede that it will not, perhaps, give him the future pattern for local government reform, but by detailed consideration in Committee it should provide information which will determine what functions a new county borough can usefully and properly perform. I therefore ask the House to give this Bill a Second Reading.

Would my hon. and gallant Friend not agree that giving this Bill a Second Reading would make it essential that the highly necessary measure of reform which we all desire should be pressed forward, which would meet the case made by the hon. Member for Tottenham (Mr. Messer) just now?

I think that my hon. Friend is quite right. As I have already said, giving this Bill a Second Reading would, in effect, give a jolt all along the line. It would give the Minister a jolt, and enable him to see that local authorities really wanted something in this way. It would also give the Minister's advisers a jolt. I am quite sure that, if we get a Second Reading, the four main local government organisations will get together more quickly and will produce a degree of harmony which is at present not entirely there.

My hon. and gallant Friend says "No, no, no." I would like to know what he means by that.

I will certainly tell him what I mean by it. If conversations take place or are arranged between the county council and the borough council and these two parties discuss their problems together and then produce something on the Floor of the House, it is far more likely to be of use to both these councils than if this Bill is given a Second Reading and goes upstairs to be discussed in Committee, when it will not come out in nearly so satisfactory a manner.

That was not the point I made at all, or upon which my hon. and gallant Friend made a negative response. I am suggesting that the four local government organisations will be persuaded to get together with greater expedition than they are at present if this Bill receives a Second Reading. I should like to feel assured

Division No.47.]

AYES

[10.0 p.m.

Anderson, Alexander (Motherwell)Harvey, Ian (Harrow, E.)Pilkington, Capt. R. A.
Banks, Col. C.Hay, JohnPrice, Joseph T. (Westhoughton)
Barber, A. P. L.Heath, EdwardPrior-Palmer, Brig. O. L.
Beach, Maj. HicksHill, Dr. Charles (Luton)Richards, R.
Bell, Philip (Bolton, E.)Hill, Mrs. E. (Wythenshawe)Robinson, Roland (Blackpool, S.)
Benson, G.Hornsby-Smith, Miss M. P.Royle, C.
Boardman, H.Hudson, W. R. A. (Hull, N.)Savory, Prof. Sir Douglas
Boyd-Carpenter, J. A.Hutchinson, Sir Geoffrey (Ilford, N.)Schofield, Lt.-Col. W. (Rochdale)
Boyle, Sir EdwardHylton-Foster, H. B. H.Shackleton, E. A. A.
Braddock, Mrs. ElizabethHynd, B. (Attercliffe)Shurmer, P. L. E.
Braithwaite, Sir Albert (Harrow, W.)Jennings, R.Steward, W. A. (Woolwich, W.)
Brockway, A. F.Johnson, Eric (Blackley)Storey, S.
Brooke, Henry (Hampstead)Jones, Frederick Elwyn (West Ham S.)Sutcliffe, H.
Buchan-Hepburn, Rt. Hon. P. G. T.Kaberry, D.Taylor, Bernard (Mansfield)
Burke, W. A.Kenyon, C.Taylor, William (Bradford, N.)
Butcher, H. W.Kerr, H. W. (Cambridge)Teeling, W.
Cary, Sir RobertKing, Dr. H. M.Thomas David (Aberdare)
Castle, Mrs. B. A.Kinley, J.Thompson, Kenneth (Walton)
Davies, Stephen (Merthyr)Logan, D. G.Thompson, Lt.-Cdr. R. (Croydon, W.)
Edwards, John (Brighouse)Longden, Fred (Small Heath)Thorneycroft, R. Hn. Peter (Monmouth)
Fell, A.Low, A. R. W.Tilney, John
Fleetwood-Hesketh, R. F.Lucas, Sir Jocelyn (Portsmouth, S.)Vaughan-Morgan, J. K.
Fraser, Hon. Hugh (Stone)Lucas, P. B. (Brentford)Wade, D. W.
Freeman, John (Watford)Lucas-Tooth, Sir HughWilley, Octavius (Cleveland)
Gage, C. H.McCorquodale, Rt. Hon. M. S.Williams, Rt. Hon. Charles (Torquay)
Garner-Evans, E. H.Maitland, Patrick (Lanark)Williams, Ronald (Wigan)
Gordon-Walker, Rt. Hon. P. C.Mallalieu, E. L. (Brigg)Winterbottom, Richard (Brightside)
Gower, H. R.Mallalieu, J. P. W. (Huddersfield, E.)Yates, V. F.
Gridley, Sir ArnoldMorley, R.
Hall, John (Gateshead, W.)Oakshott, H. D.TELLERS FOR THE AYES:
Hargreaves, A.Oldfield, W. H.Mr. Maude and
Harrison, J. (Nottingham, E.)Orr, Capt. L. P. S.Squadron Leader Cooper.
Harrison, Col. J. H. (Eye)Orr-Ewing, Charles Ian (Hendon, N.)

NOES

Aitken, W. T.Baldwin, A. E.Bowden, H. W.
Albu, A. H.Balfour, A.Bromley-Davenport, Lt.-Col. W. H.
Ashton, H. (Chelmsford)Barlow, Sir JohnBrook, Dryden (Halifax)
Assheton, Rt. Hon. R. (Blackburn. W.)Bell, Ronald (Bucks, S.)Broughton, Dr. A. D. D.
Attlee, Rt. Hon. C. R.Bence, C. R.Brown, Rt. Hon. George (Belper)
Awbery, S. S.Bennett, William (Woodside)Brown, Thomas (Ince)
Ayles, W. H.Blyton, W. R.Bullard, D. G.
Bacon, Miss AliceBossom, A. C.Champion, A. J.

that there is this desire on the part of the county councils associations to reach some accord on this matter. As I said earlier, I am not at all convinced that there is this desire on the part of the larger authorities, but we must not forget a very real and urgent desire on the part of the large non-county boroughs to secure an improvement in their status, because they know positively that they can perform the services much more efficiently and in many cases much more economically than is being done at the present time.

Question, "That the Question be now put," put, and agreed to.

Question put accordingly, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 94; Noes, 165.

Clarke, Col. Ralph (East Grinstead)Hutchison, Lt.-Com. Clark (E'b'rgh, W.)Rodgers, John (Sevenoaks)
Coldrick, W.Hynd, H. (Accrington)Roper, Sir Harold
Cook, T. F.Irvine, A. J. (Edge Hill)Ross, William
Craddock, Beresford (Spelthorne)Jones, T. W. (Merioneth)Short, E. W.
Craddock, George (Bradford, S.)Keenan, W.Simmons, C. J. (Brierley Hill)
Crosthwaite-Eyre, Cot. O. E.Lee, Frederick (Newton)Slater, J.
Crouch, R. F.Legh, P. R. (Petersfield)Smith, Ellis (Stoke, S.)
Crowder, John E. (Finchley)Lever, Leslie (Ardwick)Smithers, Peter (Winchester)
Dalton, Rt. Hon. H.Lindgren, G. S.Snow, J. W.
Deedes, W. F.Lloyd, Rt. Hon. Selwyn (Wirral)Soames, Capt. C.
Deer, G.Lockwood, Lt.-Col. J. C.Sparks, J. A.
Delargy, H. J.Longden, Gilbert (Herts, S.W.)Stoddart-Scott, Col. M.
Digby, S. WingfieldMcGhee, H. G.Stross, Dr. Barnett
Dodds-Parker, A. D.McLeavy, F.Summers, G. S.
Donner, P. W.Macmillan, Rt. Hon. Harold (Bromley)Sylvester, G. O.
Drewe, C.Macpherson, Maj. Niall (Dumfries)Taylor, John (West Lothian)
Duncan, Capt. J. A. L.Mann, Mrs. JeanTaylor, Rt. Hon. Robert (Morpeth)
Ede, Rt. Hon. J. C.Maydon, Lt.-Cmdr. S. L. C.Thomas, George (Cardiff)
Evans, Albert (Islington, S.W.)Mayhew, C. P.Thomas, Iorwerth (Rhondda, W.)
Finch, H. J.Mellor, Sir JohnThomas, Ivor Owen (Wrekin)
Finlay, GraemeMesser, F.Thurtle, Ernest
Fisher, NigelMitchison, G. R.Vane, W. M. F.
Fletcher-Cooke, C.Morris, Percy (Swansea, W.)Viant, S. P.
Forman, J. C.Morrison, Rt. Hon. H. (Lewisham, S.)Vosper, D. F.
Fraser, Sir Ian (Morecambe & Lonsdale)Mort, D. L.Wakefield, Sir Wavell (Marylebone)
Gibson, C. W.Mulley, F. W.Waterhouse, Capt. Rt. Hon. C.
Godber, J. B.Murray, J. D.Watkins, T. E.
Gooch, E. G.Nabarro, G. D. N.Watkinson, H. A.
Greenwood, Anthony (Rossendale)Nally, W.Weitzman, D.
Grenfell, Rt. Hon. D. R.Neal, Harold (Bolsover)Wellwood, W.
Grey, C. F.Nugent, G. R. H.West, D. G.
Griffiths, Rt. Hon. James (Llanelly)Oswald, T.Wheatley, Rt. Hon. John
Hale, Leslie (Oldham, W.)Paling, Rt. Hon. W. (Dearne Valley)White, Mrs. Eirene (E. Flint)
Hall, Rt. Hon. Glenvil (Colne Valley)Pargiter, G. A.Whiteley, Rt. Hon. W.
Hamilton, W. W.Partridge, E.Wigg, G. E. C.
Hannan, W.Paton, J.Wilkins, W. A.
Harvey, Air Cdre. A. V. (Macclesfield)Pearson, A.Willey, Frederick (Sunderland, N.)
Hayman, F. H.Perkins, W. R. D.Williams, David (Neath)
Heald, Sir LionelPlummer, Sir LeslieWilliams, Gerald (Tonbridge)
Hirst, GeoffreyPopplewell, E.Williams, Sir Herbert (Croydon, E.)
Holmes, Horace (Hemsworth)Price, Henry (Lewisham, W.)Williams, R. Dudley (Exeter)
Horobin, I. M.Price, Philips (Gloucestershire, W.)Williams W. R. (Droylesden)
Houghton, DouglasProctor, W. T.Wills, G.
Howard, Greville (St. Ives)Profumo, J. D.Wilson, Geoffrey (Truro)
Hudson, James (Ealing, N.)Pryde, D. J.Woodburn, Rt. Hon. A.
Hughes, Cledwyn (Anglesey)Remnant, Hon. P.
Hughes, Emrys (S. Ayrshire)Roberts, Goronwy (Caernarvonshire)TELLERS FOR THE NOES:
Hurd, A. R.Robinson, Kenneth (St. Pancras, N.)Mr. Irving and Mr. Orbach

Words added.

Main Question, as amended, put, and agreed to.

Consolidated Fund (No 2) Bill

Postponed proceeding on Question, "That the Bill be now read the Third time," resumed.

Question again proposed.

Textile Industry

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