FUEL OIL (INDUSTRIAL USE) (Hansard, 8 April 1946)

§ Mr. Erroll (Altrincham and Sale)
Before the war, the nation's fuel policy was dominated by the need to protect coal and the output of coal. Now, however, the situation is very different, and we are faced with the prospect of a coal shortage for a number of years. I want, in this brief Adjournment Debate, to urge upon the Minister the need for a completely new approach to the problem. So far, such questions as I have put to him, and to other Ministers concerned, show that fuel efficiency is not being thought out afresh but that a return is being made to the old prewar outlook, although in very different circumstances. No constructive thought appears to be given to the use of fuel oil by British industry. Not only is fuel oil more efficient as a heating medium, but it effects a remarkable saving in manpower—a matter of particular importance at the present time and not very often thought of in connection with fuel oil.
I would like to give an example of the saving in manpower in a typical boiler installation. In this particular example, the boiler house contains six 30 ft. Lancashire boilers, fitted with economisers, and the weekly cost of running with coal is £780. When fired with oil, admittedly, the cost is greater at present, and amounts to £920 per week, but the main thing is that a saving of men amounting to no less than 13 men is achieved by using oil instead of stoking solid fuel into the boilers. On one installation alone, 13 men could be saved. At present, the cost is unfavourable, on account of the fuel oil duty and also because the price of fuel oil is fixed by 1764 the Minister and is not able to fall in accordance with the supply and demand for this sort of fuel.
Another example comes from a progressive steel works, which is using fuel oil, but, in the prevailing uncertainty regarding Government policy for the future, is deterred from making fuller use of fuel oil. However, in a letter to me, this firm has stated: Certain sections of our industry require liquid fuel oil if the latest and most up-to-date processes are to be installed in this country. In other words, firing with coal is an out-of-date and relatively inefficient method. I give one more example of the striking saving in manpower which can be achieved by the use of fuel oil. This example relates to a sheet galvanising plant, in which the bath has to be maintained at a high temperature for galvanising metal. An oil fired bath uses 40 lbs. of oil per ton of sheets as compared with 224 lbs. of coke per ton of sheets. The labour saved, however, is no less than three men when using an oil fired bath. That is a considerable saving for one galvanising bath. It is of interest to learn, too, that the output is increased with fuel oil as well. The output in this particular case, when on coke, is 180 tons of galvanised sheet per week, but on fuel oil, and taking into account the saving of manpower as well, the output is 250 tons. Therefore, manpower is saved, output is increased and the working conditions, an important point, are very materially improved when oil is used to heat a galvanising bath. In view of these examples, I hope the Minister will be able to say why he is not bringing more fuel oil into the country and thus giving real encouragement to the industry. The difficulty cannot be because of our dependance on supplies from the United States, because, in 1938, our imports of fuel oil came from a wide variety of countries.
I would like to extract some relative figures from the report of the Secretary of Mines of 1938 where it states that fuel oil from British possessions amounted to 17 per cent. of the total importation. Some 23.5 per cent. came from Persia, 36 per cent, from the Dutch West Indies and only 9.2 per cent. of our total imports came from the United States of America. Therefore, we certainly cannot plead shortage of dollars in this particular matter. Of course, it may be said that it is undesirable to import fuel oil for industry 1765 when we have coal in this country, even though we have not enough for our needs. It is a fact that it would pay us financially to import fuel oil and to export the coal so saved provided, of course, that British ships were used for both the imports and the exports. I could supply figures in detail and would have quoted them if we had had a longer Adjournment. It is important to realise that we would do ourselves a good turn if we brought more fuel oil into the country. Further, it is to our advantage for other countries to remain dependent on our coal while our own industries go forward to greater efficiency by the use of oil. Our industries could develop while others remained relatively static and, at the same time, remained dependent on our exported coal. If, on the other hand, we cannot supply the coal because there is not sufficient available for export, other countries will be compelled to convert to fuel oil and the industries of foreign countries will thus get ahead of our own coal consuming industries. Therefore, from that point of view as well it is most desirable that encouragement should be given to industry to convert to fuel oil wherever practicable.
I appreciate that conversion, however much in the national interest—and I hope everyone will agree that it is in the national interest—cannot be carried out universally overnight. There are many calls on our labour and material, but I would remind the Minister that the capital involved in conversion schemes is usually not large compared with the size of the plants as a whole and, in most cases, such conversion would not absorb many man hours nor much in the way of material which may be required for other purposes.
In conclusion, I would like to refer to the fact that many enterprises want a clear indication from the Minister as to what his fuel oil policy is going to be. I hope he will be able to say tonight that he will do all he can to encourage the use of fuel oil so that industry can go ahead with the long-term planning which it is constantly being urged to do. It will undoubtedly have to be a gradual conversion over a considerable period. Perhaps the Minister might go so far as to ask the Chancellor of the Exchequer to remove the fuel oil duty when he makes his Budget speech tomorrow. That would really be a proof of the Minister's deter- 1766 mination to encourage the use of fuel oil in the national interest.
There is no doubt that the present uncertainty is holding up manufacturers. I would like to quote from a letter I received from a large and important engineering firm with a number of large plants in the United Kingdom. This is what the letter says: Like all manufacturers, we are anxious to complete our reconstruction programme in order to effect all possible economies, and the great uncertainty in regard to the availability of the various fuels is at present holding up our arrangements. I can assure the Minister that that is typical of many letters I have received on the subject. The industry is only too willing to "play ball" in this matter. It is up to him to remove the uncertainty and to give a clear lead.

§ The Minister of Fuel and Power (Mr. Shinwell)
The hon. Member for Altrincham and Sale (Mr. Erroll) has been somewhat unfortunate in raising this important matter on the Adjournment when insufficient time is available. I regret it as much as he does, because I would have. liked to say rather more than I can say in the limited time at my disposal. Therefore, I shall deal with only three of the points that he has raised in his interesting speech. May I say how grateful I am to the hon. Gentleman for having acquainted me with the points he intended to raise? He asked—and quite properly —why we are not importing more fuel oil into this country. He directed attention to what is a fact, that a great quantity of fuel oil has been produced and we are not dependent exclusively on the United States of America.
The reason we are not importing fuel oil to the extent that we need it in this country is because much of the fuel oil produced is now being used by both the United States and the British Navies in the Pacific, and also because much of the fuel oil is required for bunkers; shipping, as is natural, has a high priority for reasons with which hon. Members are familiar. We hope that towards the end of this year ample supplies of fuel oil will be made available, and in such circumstances we have to consider how far we are entitled to encourage industrialists at home to convert their boilers from coal firing to fuel oil firing. I want to encourage manufacturers; I want to assure 1767 them that we at the Ministry of Fuel and Power are anxious to expedite a greater use of fuel oil for industrial purposes. I can tell the hon. Gentleman that in March the consumption of fuel oil for industrial purposes was between 25 per cent. and 30 per cent. higher than it was in September last. That is an encouraging sign. We hope there will be greater expansion towards the end of this year, and manufacturers can rest assured that we shall render every possible assistance to them if they do convert, as I have indicated, on order to secure an ample supply of oil for their purposes.
The hon. Gentleman has asked me whether I would approach the Chancellor to induce him to say something on the subject of the Fuel Oil Duty in his Budget speech tomorrow. I am afraid I cannot anticipate the Chancellor's speech, nor can I approach him. But this I can say: if it is demonstrated, as it may well be, that industrialists are being hampered in their operations in this connection because of the high duty—and I agree it is a high duty—we shall not only give the matter sympathetic attention, but we shall do all we possibly can either to remove the duty or, at any rate, to reduce it.
I can, of course, make no commitments on that head. It is a matter for the Government as a whole, and particularly for the Chancellor. I can assure the hon. Member that I am sympathetic, and so are the Government, and if there is any impediment being put in the way of manufacturers in this regard the matter will be treated sympathetically.

§ Mr. Erroll
I would like to assure the right hon. Gentleman that there is a great body of evidence to show that the duty is having a very hampering effect. I did not refer to it because it is not the 1768 responsibility of the right lion. Gentleman. It is a most serious aspect of the whole matter.

§ Mr. Shinwell
I will take note of what the hon. Member has said and the matter will be examined. If it is demonstrated that it has a hampering effect, and that supplies are more readily available, then obviously the matter will have to be considered. We are anxious to encourage the industry in every possible direction.
There is another reason why we must endeavour to encourage the use of fuel oil. That is because not for a considerable time will it be possible to rely exclusively on coal. Coal is still in short supply, and it will continue, at any rate for industrial purposes, in short supply for some time to come. It must not be thought that fuel oil is to be a rival to coal; it must be regarded as a co-partner, to assist as far as possible in providing the fuel required for industrial purposes. I can say that we can obtain all the fuel oil we require, subject, of course, to the considerations I have mentioned—the use of it by the two Navies and by shipping. We can obtain all the oil we require from sterling sources. If the position eases, as we hope it will ease in the next few months, I hope we shall be able not merely to encourage manufactures in the use of fuel oil, but to provide them with ample supplies. I regret that is impossible to go into details and deal with some of the interesting points raised by the hon. Member. However, I will take note of what he says and I shall read it very carefully in the OFFICIAL REPORT. as will my officials. In so far as we can render assistance, we shall do so.