OIL PLANT, DOWLAIS (Hansard, 10 December 1946)

§ Mr. S. O. Davies (Merthyr)
I am extremely sorry that I am compelled to raise, at this time in the evening, a matter of vital importance to my constituency. Perhaps I need not assure the House that I have done everything humanly possible to bring about a satisfactory settlement of this troublesome matter before taking the course of raising it on the Adjournment.
On 25th November, I put on the paper a Question to the Minister of Food. When the time came for the answer, that answer was given by the Minister of Fuel and Power. The Question was this: if he will now reconsider his decision of three months ago to cease production at the oil plant, Dowlais, which rendered 180 men unemployed, having regard to the fact that his reason no longer holds good, because no step has been taken to use the plant or any part of it for the purpose which he alleged necessitated its closing down. 1126 The reply given by the Minister of Fuel and Power was: My right hon. Friend the Minister of Food cannot reconsider his decision to close this factory, which was taken originally on grounds quite unconnected with the supply of gas. The water gas plants in the factory are still required in connection with the scheme for the supply of gas for local industry. I regret the delay in the commencement of the work of adaptation. Three months ago the gas company was offered a loan under the Distribution of Industry Act covering the cost of the work and pressure is being put upon them to start the work without further delay "—[OFFICIAL REPORT, 25th November, 1946; Vol. 430, c. 226–227.] That was the reply of the Minister, and I need not say that to myself and my constituents that reply was as unsatisfactory as it was brutally frank. I should be surprised to learn that the Ministry of Food was consulted before the Minister of Fuel and Power made the statement that the decision by the Ministry of Food to close down the plant was originally taken on grounds quite unconnected with the supply of gas, that is, for local purposes. My reasons for saying this will be made clear later on. I shall only say at this stage, that the Ministry of Food abandoned their original reasons or excuses for closing down these works, because these excuses were found to be such that they should never have been made by any Ministry of any Socialist Government. In fact, they were not true.
The dissatisfaction so strongly felt by my constituents at the closing down of this plant is due entirely to the mishandling of the matter by the Ministry of Food and, may I say, by the abject way that Ministry acted upon the advice and instruction of the most powerful monopoly in this country. This plant was built out of public money at the beginning of the war. Its purpose was to process edible oils, and it is regarded as one of the most efficient plants of its kind in this country. It is highly mechanised and is capable of an enormous output, and it cost, I am informed, well over £1,000,000. The big monopoly, Messrs. Unilever, acted as the Government agents directly through the Ministry of Food, in running this plant. There are only three other comparable plants in this country, and these three are owned by Messrs Unilever. These three plants are still running today, but the plant publicly owned in my constituency has now been closed down for several months. Incidentally—and, may I say, 1127 I have been very well informed on this—this new plant at Dowlais is far more efficient and far more up-to-date than any of the other three plants.
When I received the first intimation many months ago that this Dowlais plant was likely to be closed down, I made immediate representations to the Ministry of Food. The only reasons I could get at that time for their decision to close it down were that the plant was established at Dowlais as a wartime measure; that the plant was situated too far from the nearest seaport; that there was a shortage of raw materials, and that the running of the plant was uneconomic. Those were the first reasons given to me by the Ministry of Food, reasons to which no Socialist would have the least difficulty in replying. Why should a plant of this kind, costing this country about £1,250,000, be scrapped because it was built in wartime? That could certainly never be a justification for it. Incidentally, there is no other plant such as this in Wales. I am told that there is no such plant within a hundred miles of South Wales; within a radius of 40 or 50 miles of this plant there is a population of about 2 million people; and the plant is capable of making a substantial contribution to the food supplies of this country.
Again, why should the plant be destroyed because it is situated a matter of 25 miles from the biggest port we have in Wales, or 28 miles from the second biggest port? The new industries which have been established in my constituency were given preference by the Board of Trade because they are largely exporting their products, and they are not considered to be too far from the nearest seaport. Further, this particular excuse of the remoteness of the plant from a seaport hurt me and my constituents badly, because it was precisely the excuse or pretext given to me and my constituents by those industrialists who nearly ruined my constituency in the interwar period.
On what grounds, may I ask, could the Ministry of Food be so utterly indifferent to this Government's policy in dispersing industry in this country, instead of the old cruel practice of dispersing population? It would seem that in regard to the development areas, the Ministry of Food has a political philosophy of its own, which is disturbingly reminiscent of the 1128 political philosophies of those Governments which wrought such ruin and suffering in this country. This plant was closed down, rendering 180 men unemployed in my constituency at a time when more than 6,000 of my people were unemployed. Some thousands of my people are still unemployed. As to the shortage of raw materials—another excuse made by the Ministry—I gave a short and, I think, rather effective answer. On behalf of my people, I made the simple request that the sharing of any raw materials available should be determined by the relative consequences that might result from the closing down of any one of the four plants, wherever they were placed in this country, and not by closing down a plant in my constituency merely upon the dictates of a powerful monopoly.
I should add that for a very good reason I had to ask the Ministry of Food whether it had or had not entered, or whether the Government had entered, into any secret commitment with Messrs. Unilever when the latter took over the working of this publicly-owned plant. Ultimately, after much hesitation, it was admitted that there were such commitments, and that the Ministry of Food were resolved to honour them. I am afraid, Mr. Speaker, that I rather strongly expressed my disgust, first at the obvious piece of blackmail perpetrated brazenly in the early years of the war, when this country and its people were fighting for their very existence, and secondly, I could not help feeling disgusted at the manner in which the Ministry of Food were honouring the terms and conditions of a blackmail contract. I am in possession of the terms and conditions forced on the Government by this monopoly, and I am advised that they could not be sustained in any court of law in this country The terms and conditions were wrung out of the Government and the country; these conditions are against the public interest, and I have a copy of them here. We were peremptorily prohibited from interesting any other firm in this great plant. A firm which had successfully survived this monopoly were interested in the plant, but they were told that very definite undertakings had been given to Unilevers—I quote—"that we," that is the Government, "will allow no other trader to have access to the plant."
1129 I leave it to the House to place its own construction on those words, in relation to this plant, publicly owned, bought by the people of the country and paid for by the people of the country. This Government is pledged to some kind of control over monopolies and, even now, I invite them to investigate this anti-social act by one of the most powerful monopolies in this country. Naturally, the Ministry of Food at long last realised they were in extreme difficulty if not in an unsavoury predicament. The reasons for the dosing down of this plant which had been given to me, were at last abandoned by them. This is the reason why the representatives of the Ministry of Fuel and Power are here at this late hour. I want to thank the Minister of Fuel and Power for the efforts which have been made to help me and my constituents in this matter, but I am not impressed by the easy way they took over this unhealthy offspring of the Ministry of Food, but that is their funeral, not mine.
A new reason or pretext or excuse was given to me why the plant was closed down. It had been discovered that there was likely to be a shortage of gas for industrial purposes in my constituency and in a neighbouring valley, and that the only way of augmenting the gas supplies was by using what are described as the "blue water gas producers" attached to this plant. I was informed that the position was critical in regard to the shortage of gas and that industrial development would be held up in the near future in my constituency and in an adjoining valley unless these gas producers were brought into use—and that in the very near future. That was stressed to me over and over again, and the urgency appeared to be extraordinary. The Ministry of Fuel and Power were apparently seized of this urgency as long as six months ago. It seemed that certain small adaptations or adjustments would have to be made to these producers before they could be used. Also, about eight and a half to nine miles of piping would have to be laid down. Notwithstanding the urgency that was stressed by the Ministry of Fuel and Power, not a single stroke of work has been done so far as the gas producers are concerned. Incidentally, the 180 men are still unemployed, with a few thousand others.
1130 I have taken up more time than I intended and I want the Parliamentary Secretary to the Ministry of Fuel and Power to make whatever reply he can. I am sorry for the Parliamentary Secretary. He should have been a little more alert and should not have had this foisted upon him. The protestations of urgency about the critical situation apparently have been forgotten. Nothing has been done, and my people are now stronger than ever in the opinion that, once again, all this talk was merely intended to cover the Government in their ignoble acquiescence to the dictates of this monopoly. Owing to the ridiculous way the Ministry of Food reacted to this, it will need a great deal more, before the minds of my people can be disabused. I conclude with a request, which I make in all seriousness, that this publicly-owned plant be restored forthwith. If not, I want the Government to know that there will be serious trouble. That is inevitable. My constituents, after the experiences they went through during the interwar years—and there are strong words that could be used—will not stand this nonsense any further. I must make these facts publicly known from the Floor of the House of Commons. The request I am making is that this plant shall be restarted forthwith. This might be taken as an intimation to all monopolies in this country that the Government do place the interests and the wellbeing of our people far ahead of the profit-seeking and anti-social concerns which wrought such ruin and destruction in the interwar years, and in no part of the country more than in my constituency.

§ The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Gaitskell)
The hon. Member has spoken with his customary eloquence, and I am sorry there were not more Members in the House to listen to him. My only complaint is that he has left me just seven minutes in which to reply to him, and that is hardly adequate, in view of the serious charges which he has made, and which I repudiate at once. He told me that I had taken on a very unhealthy offspring. I do not think the child is quite as bad as that. It is disagreeable in certain respects, I am prepared to admit. It squalls a lot; but I think it will grow up all right. I can assure the House that our relations 1131 with the Ministry of Food are extremely cordial, and that the closest departmental cooperation exists. Nevertheless, our friendship is not of such a character that we would have acquiesced in the apparently dastardly act which the hon. Member suggests has been performed. The decision to close this plant was that of the Ministry of Food. But we have a close interest in the plant, which I will explain in a moment; and that is why I am here tonight. The plant was built in 1940 on strategic grounds, primarily as a strategic reserve, and because at that stage we had in this country a very large quantity of whale oil, far more than we normally have. The plant was used during the war. Nevertheless, despite these large stocks, it was used at a loss. It naturally was run at a much greater loss after the war in view of the fact that supplies of whale oil fell still further.
I must at once say that any suggestion that the decision, or proposal, to close this factory was dictated by Unilevers is wrong. They had nothing to do with it. The plant was run by the Ministry—and the Ministry runs incidentally all the other plants in the country, in the sense that they are financed by the Ministry. As I explained, Unilevers' opportunity of making a financial gain out of this was practicably negligible.

§ Mr. S. O. Davies
They are making money on the raw materials now.

§ Mr. Gaitskell
They are also losing what they got for running the plant as agents. It is wrong to speak of secrecy. There was an agreement between the Ministry of Works, made in 1940, and with the Ministry of Food, made in 1941, and Unilevers. The first gave Unilevers, who were going to run the plant for the Government, the option of purchasing the plant, and also laid down that it could not be sold without their consent. The second ensured that certain secret processes—that is where the secrecy comes in—could not be disclosed to other persons. There is no reason why that should not be disclosed now. I can assure the hon. Member that it has nothing to do with the closing down of this plant. The suggestion that another firm might have come along and taken it if the Ministry of Food had not intervened and stopped them is equally absurd, for the Ministry of Food is the authority for 1132 deciding exactly where the whale oil goes. They are the only authority which can make that decision, not only in Dowlais, but throughout the country.

§ Mr. Ungoed-Thomas (Llandaff and Barry)
Which Minister is now responsible? Is it the Minister of Fuel and Power?

§ Mr. Gaitskell
I have already said that the formal decision was made by the Minister of Food. I am now going to explain why we are interested. We are interested because we want to get gas in adequate supplies into the South Wales area—

§ Mr. S. O. Davies
You have got it.

§ Mr. Gaitskell
—and because we were told by the Board of Trade that in the hon. Gentleman's own constituency there would be a need for at least 100 million extra cubic feet of gas per annum by the spring of 1947. It is a fact, and it is no good denying it, that gas in South Wales is a very serious problem, and that employment there depends on providing enough gas. In the long run, we shall deal with this problem by building gas grids and by developing coke oven gas. In the short period we have to improvise. It is not easy because of the shortage of plant, but here in the oil hardening factory we had plant which could be converted for industrial purposes. As soon as they heard that the Ministry of Food were proposing—the decision had not been finally made—to close the factory, the United Kingdom Gas Corporation, which happens to be the undertaking in the hon. Gentleman's area, asked if they could have the use of this plant in order, on the one hand to provide the extra factories which are going up in the Merthyr area with gas, and also to provide gas in the Bargoed district where the coke ovens were in a very bad way.
I have only time to say one other thing. There has been—and I readily admit it— a delay in the work of conversion. When I saw the hon. Gentleman at the end of July, as he will no doubt remember, I had expected that shortly afterwards the actual work of adaptation would be started. I am told that it has started this week. The hon. Gentleman will be able to confirm that when he gets back. It has nothing to 1133 do with the accident that he happened to have the Adjournment tonight. I can assure him that it is not for want of any effort on our part, and that we have done everything we can to overcome the difficulties in providing the necessary materials. All we can do at the Ministry is to urge, encourage and cajole the company concerned, and we have done our best to that effect. I think it is fair to say that they are responding, but there are difficulties about getting supplies of pipes and other materials. These materials will 1134 come along, I think, just in time, and we shall be able to supply the gas needed to provide the extra employment in Merthyr next spring and summer.