ROLLING MILL MACHINERY. (Hansard, 20 June 1939)

§ The Parliamentary Secretary to the Board of Trade (Mr. Cross)
I beg to move, 2158 That the Additional Import Duties (No. 4) Order, 1939, dated the twenty-second day of May, nineteen hundred and thirty-nine, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-second day of May, nineteen hundred and thirty-nine, be approved. This is an Order to increase from 20 per cent, to 33½ percent. the ad valorem duty on certain kinds of rolling mill machinery which are set out in the Order. The revival in recent years in the United Kingdom iron and steel industry and the development of rolling mills have led 2159 to an increase in the demand for rolling mill machinery. In the past, for upwards of a century, in the days prior to the War, the United Kingdom heavy engineering industry held a commanding position in the design and production of rolling mill machinery, but after the War, in the time of depression in the iron and steel industry, they lost ground at a period in which rapid progress was being made in the United States of America and in Germany. When the revival set in a few years ago the United Kingdom industry responded and made substantial progress in expanding and modernising their plant, and they are now able to supply machinery which is competitive with foreign products both in design and in construction, but they are faced by foreign competitors who have established a firm hold in this country by virtue of the reputation which they have established in recent times for superior design and greater experience in this type of machinery, and in some cases they quote prices which suggest either that they are subsidised or that the concerns selling in this country are willing to sell at a loss for the purpose of maintaining their hold on this market. This applies particularly to German competition, which has supplied an unusually large volume of imports in the first three months of this year. The German imports in this period of rolling mill machinery were 58 per cent. by weight and 75 per cent. by value above the corresponding figures for the same period last year.
On the non-ferrous side, a substantial development is now occurring in the rolling of special aluminium and magnesium light alloys for armament purposes, and valuable orders have recently been placed in. Germany for mills which could have been made in this country. The mill rolling industries are safeguarded against possible interference or hampering of their development by Section 10 of the Finance Act, 1932, under which the Import Duties Advisory Committee has power to recommend the importation of machinery free of duty, or at a reduced rate, in cases where similar machinery is not obtainable in this country. The Import Duties Advisory Committee state that they propose to continue to use this power. The case for the increased duty is very fully set out in the White Paper, and I think the House is fully seized of the desirability of 2160 maintaining a strong and efficient industry in this country for the supply of this machinery. The industry is equipped to play its part, but this increased duty is necessary, in the first place to enable it to regain its hold on the home market, and, secondly, to put it on a remunerative basis from which it can make attacks on foreign markets and hope to regain them.

Mr. Alexander
What representations, if any, have been made by the owners of rolling mills about this? There is not a single reference in the White Paper to the actual users of the rolling machines.

§ Mr. Cross
I have no information of any representations made by the users of the machinery.

Mr. Alexander
I do not propose to ask my hon. Friends to divide against this Resolution, but there are one or two points to which I should like to draw attention. At the bottom of page 4 of the White Paper it says: We regard it as essential that there should be no serious hindrance placed in the way of the metal working industries obtaining the most up to date and most efficient machinery wherever produced. Anyone who represents an iron and steel centre knows how important it is that the spirit of that phrase should be carried through. In the next paragraph it says: We are, however, empowered under Section 10 of the Finance Act, 1932, to recommend the grant of a licence to import machinery at a reduced rate of duty, or free of duty, in cases where similar machinery is not obtainable in this country and we have used this power freely in cases where we have been satisfied that there was a substantial difference between the foreign machines it was desired to import and any which were obtainable in this country. While it is very essential that the actual users of machinery of this kind should be able to make the most efficient use of the machinery available, I am bound to say that my experience so far is that, when we ask for a special licence to import machinery which is requisite for obtaining efficient production, it often takes the Import Duties Advisory Committee from 12 months to two years. The Parliamentary Secretary ought to give us some assurance before we give him a vote of this kind that, where it is necessary to apply for a licence to import something that is really necessary for the efficiency of the industry, we ought to be able to get it without waiting 12 months or two years.

§ Mr. Cross
I have not looked into that point. I can only give my undertaking that I will do so and I will bring to the attention of the Import Duties Advisory Committee the remarks that the right hon. Gentleman has made.

§ Sir R. Acland
I should like to ask the Parliamentary Secretary to explain more fully how he makes out that the figures rather confusedly given in this Paper support the case that he is making. I would draw attention to the figures at the bottom of page 3. It would have been more convenient if they had been put down alongside and at the right-hand of the figures in the table a little higher up. They show that the imports of machinery in 1937 were £853,000, on which one-half, as we see from the next paragraph, was imported free of duty under licence. One-half consisted of machinery not manufactured in this country, that is to say, only some £400,000 represented machinery that was competitive with British machinery. In the next year the imports went down to £435,000, of which one-third was not competitive, leaving some £300,000 competitive.
Comparing these figures as amended —and I think I am right in amending them in this way—with the figures given on page 3, and doubling the last figure of £442,000 because it represents only six months, we find that in the last four years, to the nearest £50,000, British production has been £400,000, £400,000, £700,000 and £900,000, while the foreign importation of competitive machinery has been £200,000, £250,000, £400,000 and £300,000. In other words, British production in those years has increased by 150per cent., whereas foreign importation has increased by 50 per cent. I would like the Minister to tell us how, on these figures, he sustains his case that the industry is meeting tremendous, overpowering, cut-throat, subsidised competition which is likely to drive it out of existence if we allow things to go on as they are. On the contrary, it seems to me that the industry is doing very nicely, and is expanding rapidly, and I cannot see how the Minister is justified in bringing before us something which simply has the effect of enabling the industry to increase by roughly 13 percent. the prices it is able to charge for its products.

Mr. J. J. Davidson
I think the admission which the hon. Gentleman has just made to us indicates exactly the state in which the Government are as regards their industrial policy. The figures contained in this White Paper should be placed on record, because the White Paper itself is an interesting commentary on the way in which the Government have allowed our home industries to deteriorate during their reign, while importation has gone up tremendously, assisting foreign markets that have been continually opposed to us, not only economically, but in building up armaments against the rearmament policy of this country. On page 3 of the White Paper we are told frankly and bluntly the extent to which foreign suppliers of rolling mill machinery have made progress in the United Kingdom market during the recent period of activity. The statistics given show the Government up as an inept Government so far as the trade and industry of the country are concerned. In 1934, the imports of this class of machinery were £99,000. They rose in 1935 and 1936, until in 1937 they amounted to £853,000. During this period, when our exports were deteriorating and our imports increasing to a tremendous figure, against the best interests of the whole community, this Government has been in power, with its industrialists, its financial magnates, and a majority that no other Government has enjoyed for many years. The White Paper is an indication that the Government, apart from policy, have to resort always to the bolstering up of industries in this country by financial methods which can be seriously questioned, and the sooner they get back to a proper perspective of trading relations in foreign markets the better it will be for the general community of the country.

§ Mr. Cross
The hon. Member for Barnstaple (Sir R. Acland) asked me one or two questions. If he had read further he would have seen that the very large imports in 1937 to which he referred—and this must apply also to the large output in this country—reflected the very rapid development which took place in the steel industry during that period, including the Ebbw Vale works. It is quite evident that the Advisory Committee are of opinion that the demand for this type of machinery will now come 2163 back to normal. Indeed they say that these conditions have now passed and it is probable that the demand for this type will substantially remain at a lower level than has obtained. That seems to me to answer the hon. Member's question.