STEEL INDUSTRY (SCOTLAND). (Hansard, 10 March 1937)

§ Mr. Hardie
I wish to raise the question of the supply of steel to the re-rolling mills in my constituency. The steel shortage 1299 means that a large number of men are rendered unemployed. Those who have these re-rolling mills have been warning those concerned for six months past that this situation might arise. I know that the representative of the Government will try to-night to fob me off by saying that it is none of the Government's business to deal with the supply of steel, but I hope that that argument will not be used. The Prime Minister took the feet away from it by the statement which he made some time ago, pointing out that since the Government had done so well by the steel trade he expected the steel trade to do something for the country. The steel makers proudly boasted some years ago of a certain change in manufacture, and said "anybody can have these blooms." As a result, the trade went to Belgium, which country was for many years supplying the blooms. The steel trade then got into a bad condition. Before the tariff was given, the steel makers got all the ships they could and they bought all the blooms they could in Belgium and brought them in in one week-end; and they said to the Chancellor: "Look how many of these things come in in one week."
I am surprised that the Government were so stupid as to put a tariff on the things that this country could not make. That is the history of what created the present condition of affairs. When the steel people got their monopoly, it was on the condition that they would keep up adequate supplies of that kind of steel, especially the re-rolled, but that promise has not been kept. The steel makers have full power, the monopoly, to say even what shall be imported. Monopoly is the basic idea of the Government. If there had been any foresight on the part of these big captains of industry, as they are proud to call themselves, in the steel trade why should there be only 15 out of the 52 blast furnaces out of commission in Scotland? You can blow in a blast furnace like that when you have had three or four months' warning.
The restriction on production is also a question which the Government should deal with, since they have been so kind to the steel people. It is noted in the trade papers that the steel makers are indicating to the rollers that there is going to be an increase in the price of steel on 1300 31st May, and not only a shortage. That is the only way in which monopoly can operate. One would have thought that if the statements made from the other side as to the interest taken in the development of the industry, one would have thought that the opportunity would have been taken by the Government, when it presented itself, to make the steel makers keep their promise and do their job. They are not doing their job. The whole of the steel trade is behaving like a big, spoilt boy who does not know how to behave himself. Nobody can trust the steel trade in the hands of an industry like that.
The Parliamentary Secretary to the Board of Trade smiles. He knows. I remember when he was on these benches as a Liberal, and when he and his Chief were supposed to be the two greatest exponents of Free Trade in the world. Now we see them, the dog still chained to his master, but with a different collar on. It is a sad spectacle. I hope the hon. Gentleman is going to give us some details in regard to the question I have raised. Many protests are made about the great honesty, clarity and brain power of Ministers, especially in regard to industrial matters, but here is a shortage of British steel. Why did the Government stand by and see British ships sold across the water? There again there was no industrial foresight. The whole thing is simply due to the lack of someone in charge who knows what is going on, and who can control the trade and say that such-and-such material is required and must be produced.

§ The Parliamentary Secretary to the Board of Trade (Dr. Burgin)
Before the hon. Member resumes his seat, perhaps he would be good enough to tell me really to what it is that he is asking me to reply. A certain amount of scorn has been poured on the leaders of the iron and steel industry and on Members of the Government, who apparently were not clever enough because they did not foresee that there would be a world demand for steel in the year 1937, but I have not the slightest idea, if the hon. Member will excuse me, of any question that he is putting to me.

§ Mr. Hardie
I was trying to save time; I thought the hon. Gentleman would remember the questions that have been put 1301 in the House. The question is, what is the Government prepared to do to get the raw material for the mills that are closed in Springburn, my constituency? I want him to tell us how that is going to be done, and how these men are going to be put back into their jobs.

§ Dr. Burgin
I now understand that the specific question is whether there is a shortage of material for the re-rolling mills in Springburn. I suppose that means Messrs. Frederick Braby and Company, or something of that kind. Does the hon. Member claim to speak for them?

§ Mr. Hardie
The men are unemployed, and the reason given by the firm for their being unemployed is that there is a shortage of raw material.

§ Dr. Burgin
I am asking the hon. Member whether he wishes the House to understand that either the firm or the firm's workpeople desire him to raise this question and impute fault either to the Federation or to the Government?

§ Mr. Hardie
I have answered that question.

§ Dr. Burgin
I understand that the hon. Member says that he has that authority.

§ Mr. Hardie
I have the authority of the people who are unemployed. Those are the people whom I represent now. The firm are not interested in that sense. These people are unemployd through lack of materials, and surely the hon. Gentleman will not deny the fact that the managers of the works tell the men that the reason they are unemployed is a shortage of material?

§ Dr. Burgin
I do not want to deny that there is a world shortage of steel, but I wish categorically to assert that it is not either the fault of the Government or the fault of the British Iron and Steel Federation that steel is not reaching Springburn at the present moment in the quantities that the hon. Member would desire. I repudiate entirely the suggestion of either lack of foresight or lack of knowledge. Let us look at the position of the iron and steel industry in Scotland and in particular in Spring-burn. That I think is a sheet works. The real point is this. Why is it that works which could employ people is starved of raw material, and why are there furnaces in other parts of Scotland idle which might on a certain hypothesis 1302 have been producing raw material. Those are substantially the points that are put. I will deal first with production. I know of no Scottish steel works capable of producing, but not working, other than perhaps the new furnace of Messrs. Colvilles, who are building two furnaces, one recently completed and the other not yet ready. They have been unable to start the first furnace owing to a shortage of pig iron, scrap and coke, and I should not have thought it was necessary for any argument to be used to tell hon. Members that there is a world shortage of pig iron, of scrap and of suitable coke.
Many of the troubles with regard to pig iron are very much accentuated by the Spanish position. There is an acute shortage of foreign ore. The blast furnace industry has not been kept up to date in Scotland, owing very largely to the decline in Scottish industrial activity and partly because of the exhaustion of the supplies of splint coal, on which that blast furnace industry was formerly based and which the furnaces were specially adapted to use. The hon. Member said there were 15 furnaces in operation. There are 67 blast furnaces in Scotland, but a large number of them are obsolete, and would be entirely uneconomic to re-start.

§ Mr. Hardie
Whose fault is it that the plant has not been kept up to date?

§ Dr. Burgin
There was a Departmental Committee on that, which reported in 1936, and its report contained a very interesting series of paragraphs on the question: Owing to technical developments in the iron and steel industry in recent years, Scotland is at a disadvantage compared with England. The only way in which Scotland can compete is by a complete modernisation of coke ovens and iron works by the installation of the most efficient by-product recovery ovens and the selling of the large supplies of coke-oven gas thus made available. As modernisation depends ver ylargely, if not entirely, on a market being found for coke-oven gas, gas undertakings adjacent to the coke ovens should seriously consider the taking of supplies and consumers of fuel for industrial purposes should investigate their processes and heat requirements in order to see whether advantages will accrue to them by using gas. It is not only the captains of industry. There is a good deal of responsibility on the Glasgow Corporation. I was only at pains to describe what has happened. Here are blast furnaces which have fallen into desuetude through a change of prac- 1303 tice. One obstacle to altering the practice has been the refusal on the part of large possible consumers to take the coke oven gas. It seems regrettable that you should have two things existing at the same time—works desirous of acquiring raw material and at the same time idle plant that could produce that raw material. In so far as the hon. Member makes out a case for modernisation, he speaks with credit and calls the attention of the industry to something that may well receive their consideration, but it is quite another matter to come along and say that either the Government or the British Iron and Steel Confederation, or some monopolistic powers are standing in the way of supplies going to Messrs. Frederick Braby.
That case has not been made out. The hon. Member has not produced any evidence and has not even suggested that there is any evidence as to the source from which this raw material could be procured. If he knows of any source which is not at present being tapped, either by the Government or by the and Steel Federation, from which raw material can be secured for the rolling mills, I hope he will communicate it to me. It is my duty to investigate it. Although he says that the Government have reduced the duty recently and although the Iron and Steel Federation can go to the cartel countries and say "You must accelerate your deliveries," all the cartel countries are grossly in arrear with the delivery of steel which they have contracted to deliver. There is no line of steel in respect of which the cartel countries are not grossly in arrears. How can the hon. Member say that the reason for the shortage of steel for the Spring-burn Rolling Mills is monopoly or the action of the Government, or the action of the Iron and Steel Federation.

§ Mr. Hardie
That is what I suggest.

§ Dr. Burgin
What has happened is this. The iron and steel industry that was the dismay and despair of everyone in this 1304 country from the year 1920 onwards is now in a state of relative prosperity and working very nearly to maximum capacity and producing record outputs of different kinds of steel. All that has been brought about by the gradual resuscitation of the industry. No one could perceive for a moment that there was going to be a sudden demand in all parts of the world for every raw material which goes to make up steel, and for every kind of steel, from raw steel to the semi-manufactured product. Nobody could foresee that there would be a sudden unprecedented demand in every steel-producing and steel-consuming country. That is what happened.
The advantage of having a resuscitated industry, the advantage of having the British Iron and Steel Federation and the advantage of having the cartel arrangement is that all the steel that can be procured is distributed among the users equitably and at reasonable prices. The hon. Member asks, Is there going to be not only a shortage but a rise in prices? Of course the two things go together. You cannot conceivably have a world shortage without a tendency for prices to harden. The Iron and Steel Federation prevents there being a scramble in which only the big interests procure what is going and outbid the small ones. It provides a power in which there is some sort of rationing and some regard for consumers' interests, and in which the Iron and Steel Federation, watched over most jealously by Government Departments, is called upon to fulfil its undertaking. I deny entirely the suggestion that the Iron and Steel Federation has broken a pledge to re-roll. It has done nothing of the kind. It has been unable to supply all the raw material it would wish, because the material is not available.

§ Mr. Hardie
It is Corby all over again.