§ The President of the Board of Trade (Mr. Lyttelton)
The aim of. the Government's economic policy in war-time is to facilitate the fullest possible transfer of resources to war production. This policy demands the severe cutting-down of civil consumption and the release of labour, materials and factory space for more essential purposes. Substantial cuts have already been made, and these may well have to be extended. In particular, the Government are concerned with the group of industries manufacturing consumer goods affected by the Limitation of Supplies Orders or by the rationing of raw materials—hosiery, pottery, the major textile industries, boots and shoes and some others. These industries provide the main sources of factory-trained labour for munitions, and their consumption of imported materials must be kept down to the minimum required to meet essential needs.
If they consulted only their own interests, these industries might wish that all their component firms should carry on with their remaining share of the trade in the hope that conditions might improve. From the point of view of the national interest, however, it is most undesirable that cuts in civil consumption should be met by large scale part-time working. A spreadover of this kind results in an uneconomical use of certain types of labour. It does not free the factory and storage space which will, in many cases, be needed for Government use. The effect of a diminished turnover on costs may, in some instances, have serious repercussions on prices which the Government cannot ignore. Finally, it would be worse than useless for firms to allow their working capital to be eaten up in the vain hope that the position might become easier. The policy of the Government must, therefore, be to concentrate production in a reduced number of factories 775 working full-time. These factories should be able to produce the output required for Government orders, the greatest practicable export trade and the minimum needs of our population, while at the same time preserving the goodwill of the factories closed down. The closed factories should be kept ready to start up again as soon as possible after the war. The Departments concerned will then take all measures open to them to assist their speedy re-opening; meanwhile the Board of Trade will keep a record of factories closed down and the Ministry of Labour will keep a record of transferred workers so that they may be able to resume their old employment after the war.
The Government will facilitate this concentration by granting to groups of undertakings which fulfil the necessary conditions special help to safeguard their requirements of labour and of raw materials. Losses due to the war assume various forms, and His Majesty's Government regret that they cannot contemplate the use of public funds to relieve the position and provide compensation. In this matter the Government's policy remains as stated by my right hon. Friend the Prime Minister in his statement on the War Situation on 5th September last. Where, however, business losses are due to a process of industrial consolidation, under which certain firms by closing down permit more work to be undertaken by others, there is a clear duty on the latter to provide a measure of compensation for the former. The Government feel confident that those concerned will carry through these group arrangements in a manner that will mitigate the hardships inevitable in the process of contraction.
In pursuance of this policy, the Board of Trade, in association with the Ministry of Labour, will open discussions as soon as possible with representatives of employers and workers in the industries concerned as to the degree of concentration which they should achieve, and the other matters arising; for example, the factories to be left in production should not be in districts where the demand for labour for munitions is relatively heavy.
In order to help the Board of Trade in carrying out this task, the scope of the Export Council is being expanded, and it will be re-named the Industrial and Export Council. A Committee of the 776 Council will be formed, which will include the Parliamentary Secretary for Raw Materials of the Ministry of Supply and a representative of the Ministry of Labour. The number of business members of the Council is also being increased, so that men themselves experienced in business may advise and guide the industries concerned in carrying through this difficult work of reorganisation.
As I have indicated, the Government are looking to the industries themselves to co-operate by formulating proposals for effecting the necessary measure of concentration, in consultation with the Government Departments concerned. The firms themselves should be in the best position to frame plans in the light of their knowledge of their own capacity and circumstances. At the same time, the Government accept ultimate responsibility for seeing that the necessary measure of concentration is achieved; and, where firms are either unwilling or unable to meet the situation by their own efforts, the Government will be prepared in the last resort to impose the re-organisation which circumstances require.
There is one further matter. The Board of Trade are being entrusted with the task of co-ordinating the requirements of all Government Departments for factory and storage accommodation; an executive organisation is being established under a Controller-General of Factory and Warehouse Accommodation. It will be our purpose to meet the requirements of the various Departments as far as possible without interference with the factories in which work is being concentrated under the arrangements described above.
§ Mr. Shinwell
The right hon. Gentleman will appreciate that this action, which, though belated, is very necessary, was advocated many months ago, but I should like to ask two questions. The first is with regard to compensation to firms regarded as redundant. Will the right hon. Gentleman consider, in lieu of Government financial assistance—though on that point the matter might be reconsidered—the creation of holding companies in which redundant and closed firms will have a share in the financial stake? Secondly, has he taken into consideration the importance of speedy absorption of the labour which is dispossessed?
In regard to the first point, the nature of the scheme is that redundant firms or members of redundant firms should be compensated by those who are going to be able to work at full capacity. The appropriate machinery for securing that profits are distributed in an equitable way will vary in each industry, and nothing would necessarily preclude the distribution of profits by the holding company, but there may be even better methods. The second question is really more a matter for the Minister of Labour.
§ Mr. Shinwell
Is there to be anything in the nature of legislation, or is this to be left entirely to the voluntary efforts of the industries concerned?
§ Mr. Lyttelton
No legislation is required, because the supply of raw material and of labour and plant is already under Government control.
§ Mr. Lees-Smith
May I ask the Lord Privy Seal whether, if there is a desire, he will arrange for a Debate on this subject?
§ Mr. Attlee
Certainly, but we have to have regard to the pressure of Business. Perhaps my right hon. Friend will discuss the matter at the appropriate time, but we are rather pressed now with financial Business before Easter.
§ Mr. Granville
Will the right hon. Gentleman take into consideration the urgency of carrying out these regulations, and cannot we have a Debate at a reasonably near date?
§ Mr. Silverman
Will my right hon. Friend consider the advisability of having such a Debate, at any rate, before the policy outlined by the right hon. Gentleman is put into operation?
§ Mr. Attlee
The questions of the two hon. Members cancel each other out. One says it must be done at the earliest possible moment, and the other wants to wait for the Debate. It is obvious that in a matter like this action must be taken at once. Hon. Members may be agreed on the need of concentration, but the question of how it is done might well be debated.
§ Mr. Mander
If agreement is not reached in an industry or among the remaining firms to compensate the firms that are closed down, will the Government hold themselves responsible for imposing some form of compensation?
§ Mr. A. Bevan
May I ask the Lord Privy Seal, in view of the extreme urgency of this scheme being carried out at once, and of Parliament having a discussion, whether there is any reason why we should not meet on extra days? The House is perfectly prepared to do that.
§ Mr. Ellis Smith
Will the right hon. Gentleman consider, before the Debate takes place, the need for trade union representation on the new Committee, in view of the effect of the scheme on the workpeople, and also pay special attention to those industries which do not need to import raw material and which play a big part in the export trade?
§ Colonel Sir John Shute
In view of the gravity of the statement of the President of the Board of Trade, may we ask him and the Minister of Supply to meet those in charge of these great businesses before these drastic alterations are carried into effect?
§ Sir Frank Sanderson rose—
§ Sir F. Sanderson
May I not ask a supplementary question? It is in the national interest that I should do so.
§ Mr. Speaker rose—
§ Sir F. Sanderson
Am I not in order in asking a question which is of the utmost importance to industry, seeing that I have risen several times since the statement was made? The statement I wish to make is in favour of the Government.