HC Deb 06 December 1948 vol 459 cc227-38

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. R. J. Taylor.]

1.34 a.m.

Mr. Hugh Fraser (Stone)

I must apologise to you, Mr. Speaker, and to the House for keeping hon. Members so late, but the matter which I have to raise is one of considerable concern and is related to very grievous allegations I made against the Ministry of Supply a few weeks ago. The allegations were about the dumping of radio equipment in what is called the Wonder Pit at Cheadle, in Staffordshire, and I propose now to substantiate those charges.

This matter was first raised by me nearly three years ago. I was told by the then Minister of Supply, when I put a Question asking whether this radio equipment which had been dumped had had withdrawn from it parts and valves, that the sets were damaged, unserviceable, not worth repairing, and unsuitable for civilian use. I was also told that useful parts, such as valves, had been removed, and that dumping in an abandoned mine shaft was chosen as an economical method of destroying small articles. This statement was reiterated on 15th November, 1948, when the Minister of Supply went further and said that most careful inquiries had been made to see whether the apparatus was saleable or usable.

One naturally expects that the premise of Questions in this House, and the way business is conducted, is that the answers given to Questions should be true. I should like to examine this matter and to say that two of my constituents, Mr. George Eyre and Mr. Thomas Weston, did not have my simple faith in the accuracy of Ministerial replies. They went so far as to dig up the Wonder Pit, where they discovered a large quantity of supplies. What they discovered was that 10,000 sets had been dumped and that also, far from being unusable, many had guarantee of serviceability labels. A large number had arrived in cartons and they were still in them on the site. In 90 per cent. of the sets, no valves whatsoever had been removed; some had been smashed, but it is a tribute to British workmanship that, although sets had been jettisoned with great force, 60 per cent. of them were in workable condition. Far from being of no value, there were 500 cathode ray tubes. I have brought a considerable amount of this equipment to show to hon. Members, and if it is desirable to do so, I will exhibit it in the Tea Room. I also have a question to ask concerning some rubber goods, with which I will deal in a moment.

It was only on Friday last that the Joint Parliamentary Secretary to the Ministry of Supply was complaining that the production of television sets was being held up because of a shortage of cathode ray tubes. It was only the other day that the Minister of Health said that the thing which was holding up certain X-ray services in hospitals was cathode ray tubes. Here are 500 of them, worth between £10 and £15 each. The sets contained certain other items—two diode tubes, three E.F. 50 valves, the most useful of all radio receiving valves, and which are applicable especially to civilian sets.

In addition to these 10,000 sets, there was one 12 to 240-volt reversible rotary convertor. These items, apart from a great miscellaneous collection of transformers and condensers, are of considerable value. Even if we assume that the prices which are quoted today are the best, diode tubes are from 30s. to £2 each, and valves are from 18s. to 20s. each. Mr. George Eyre has found them of sufficient value to himself to be able to construct a small bedside set for six guineas by using this equipment. What is certainly true is that the rotary convertor is a piece of equipment of considerable value, selling on the market today at £2.

I should like to go further and investigate the riches of the Wonder Pit. Even assuming that all these valves had been broken, there still remain parts of considerable value. It is all very well for the Government to spend a great deal of money on the prevention of waste, and to appeal to people, by millions of posters, to save bones, scrap metal, and waste paper; but they have themselves wasted a considerable amount of precious raw material. These 10,000 sets quite apart from the valves, contain 2½ lb. of brass, ½ lb. of copper and ½lb. of zinc. Even without the valves, the basic raw materials in these sets are worth 23s. 6d. in each set. Even more remarkable is the fact that, far from these sets having been properly salvaged, they still contain—perhaps the Minister knows it—a small quantity of platinum. As perhaps the hon. Gentleman knows, platinum is extremely important in the hot-spots in radio, and to quote Mr. Hilaire Belloc: I shoot the hippopotamus With bullets made of platinum. Because if I use leaden ones, His hide is sure to flatten 'em. This is a very serious matter. Eight little blobs of metal worth £23 an ounce! To each 25 sets there is approximately l oz. of platinum. That is considerable. It means that about £1 worth of platinum in each set has been buried in the mine. Certainly the National Coal Board, and even some studious gentry in South Africa, might take a lesson from the Minister of Supply in salting mines.

I asked the Minister for an inquiry, which was refused. I carried out a further investigation myself. I can produce these sets from the Wonder Pit, and I seriously inform the House that this whole process of dumping is much more extensive than just this one instance. Throughout the country, I am informed, there are many other mines which have been used as dumping sites by the Ministry of Supply. For instance, in a nearby pit, New Hayden, 1,800 tons of rubber was dumped and, while some of the tyres were useless, several thousands were perfectly good. At the time the dumping took place, bicycle tyres were fetching between £4 and £5 apiece. Brand new tyres, wilfully slashed, were being dumped by vehicles having tyres which could hardly keep them on the road. Even at this moment there is a very firm rumour going round—and I believe that it is very near the truth—that the Board of Trade are contemplating the dumping of another 8,000 tons of rubber in a disused pit in Staffordshire. I should very much like to have an answer on that point.

The accusation against the Government is three-fold. It flows from the fact that the system of dumping war stores was bad. I talked to one gentleman responsible for dumps, and he said that on one occasion he had 30 men waiting to dump goods into a pit. It was bakelite scrap. He rang up the factory. The factory said "How are you doing?" He said "I am waiting here with 30 men." The factory said "You will have to wait a bit longer, the stuff is not made yet."

The system was ill worked by the Government for three reasons. First, there was no serious operation of salvage carried out by the Government. In 1945 and 1946 it would have been perfectly possible to have seen that no valuable materials were thrown away. We have this single example of Cheadle, of which I know the facts, but there are thousands more throughout the country. It is no good the Minister saying that it was impossible to do anything else, for we now know that after the goods had been taken 200 miles from London and left in the pit for two years, private enterprisers have got the stuff out and disposed of it at a profit. If that had been done by the Government three years ago, the saving to the country would have been very great indeed—£30,000 in this pit alone. The cathode ray tubes are worth about £10,000, the platinum about £8,000 to £10,000, and the valves and so forth probably another £10,000. That is my first accusation—there was no proper salvage.

My second is that war contracts were sloppily terminated. It would have been far better to have spent money in saving the raw materials. It would have been far better to have paid the cost-plus, and if need be have sent the men on holiday, than waste precious raw materials.

Thirdly, I have been told on two occasions in this House—I do not know what is the Parliamentary expression—little less than a terminological inexactitude about what is going on in Cheadle. At that time I demanded an inquiry by the Government. Today I reiterate that demand. Cheadle is but a microcosm of what may have happened. There is still a chance of recovering these goods if the Government are bold enough to let private enterprise recover what they have squandered.

1.48 a.m.

The Joint Parliamentary Secretary to the Ministry of Supply (Mr. John Freeman)

In view of the comparatively serious charges and of the extravagant language the hon. Member has used against my Department, I think that the best thing I can do is to go over the story as I have been able to find it out, and I may say that I have been deeper into the Wonder pit at Cheadle during the past few weeks than Mr. Weston or anybody else.

The disposals policy which this Government have followed was worked out by the Coalition Government in war time and published in a White Paper at the end of 1944. It was agreed by all parties. The substance of it was that where there were surpluses which were disposable in the civilian market they should be so disposed of through normal trade channels, and that consultations should take place industry by industry to work out what was the proper method of disposal. Accordingly, panels were set up in the different industries to work out detailed methods.

Radio equipment was regarded by everyone from the very beginning as presenting one of the most difficult problems of all for two reasons: (1) it had been produced in astronomical quantities in war time, and there was every prospect that this high production figure would continue in peace time, and, (2) a large percentage of this production had been for highly specialised purposes. It was felt by the trade, by my Department and by the Board of Trade both in war time and after the war, that radio equipment was the one that was going to present one of the greatest disposal difficulties of all.

The panel was assembled to discuss the problem of how to get rid of this surplus and the trade was represented by the Radio Industry Council, which the hon. Member will probably agree was best fitted to represent the radio industry. That panel made no progress in its operations, and months after it had been assembled the Government had not succeeded in finding an adequate way of getting these disposals started, mainly for the simple reason that the trade strongly agreed with our view that it was going to be a very difficult matter to release these vast quantities on to the market without wrecking the radio industry. They were unable to suggest methods of disposal and a situation arose after a period where my Department felt that it was intolerable to go on procrastinating any longer. We had therefore to take a decision, whether the trade were prepared to be helpful over it or not. I would emphasise that I am not making a general attack on the radio industry over this at all. I think that on this particular occasion the Radio Industry Council was not very helpful, but the reason for that was precisely that they did agree with the view, subsequently expressed by my own experts and technicians, that the problem was very difficult and did not lend itself to a very favourable solution.

The first step, when it was decided that disposal was to go ahead, whether the industry was prepared to co-operate or not, was to try and estimate which items of this vast quantity of equipment had a civilian use and which, broadly speaking, had not. This had to be done by our own technical advisers, simply because the trade itself was not prepared to put forward adequate proposals. It would, I think, be helpful if I read one paragraph of a letter which my Department felt it necessary to write to the Radio Industry Council in October, 1945. This letter summarises a meeting which took place with the Council and my officials the previous days. It begins by saying that no progress had been made and regretting that the trade had been unable to put forward proposals which would facilitate the disposal of the surpluses. It goes on to state that the Department must now take upon itself the responsibility of making up its mind: It is, for example, necessary to record that lists of current surpluses referred to the Council at the end of June have not, despite repeated pressure, yet been returned to the Department with information as to the quantities which the Council's constituent firms may desire to purchase. Such delay (3½ months to date) places the Department in a most difficult position, particularly as offer to manufacturers is only the first stage of enquiry. Furthermore, the Council has been at pains to represent the limitations of the market, and that these should lead to a policy either of wholesale storage against uncertain future demands or of wholesale destruction. That was the view that the Radio Industry Council took in 1945. We had therefore to decide how to classify and get rid of these surpluses on our own responsibility. Those which we considered had a civilian use we disposed of as best we could by competitive tender. Those which we considered had not a civilian use we had either to break down for their component parts or dump. Moreover the situation was considerably complicated at that time by the tremendous pressure which was being put on the Government by Members of both sides of this House to clear industrial premises which were being used for Service purposes as quickly as possible.

The equipment which the hon. Member referred to comes, as I am informed, from the R.A.F. Repairable Equipment Depot at Neasden, just outside London, which was a property at that time urgently required by its owners for industrial purposes. All equipment in that depot was purely Service equipment and I am advised that it was all unserviceable. I have listened carefully to what the hon. Member said and I think that the divergence between us on the facts is not so great as it might appear. Everything which went into the depot was unserviceable in that it was sent there by R.A.F. technical officers in war time, or immediately after the end of the war, as being unserviceable. Hon. Members know that in war time the word "unserviceable" covers a multitude of sins. Some of this equipment was damaged; some of it may just have suffered some deterioration in storage. I will not argue about that, but all of it was declared to us as being unserviceable.

Mr. H. Fraser

A great many were marked "serviceable."

Mr. Freeman

If they were, it is no good blaming my Department for it. The Ministry of Supply have to take surpluses as declared. All these were declared by the R.A.F. as "unserviceable" and I am bound to say that in all that took place——

Sir William Darling (Edinburgh. South)

Unserviceable, not unsaleable.

Mr. Freeman

That is another matter. It may indeed be that the degree of unserviceability varied.

I must emphasise at this point in regard to the figures the hon. Member has bandied about that, to the best of my knowledge, there were about 300 tons of this equipment dumped in the Wonder-pit though it is of course a little difficult to investigate at this date. The total figure of radio surpluses which we have disposed of by sale and other methods, is something of the order of 50,000 tons. Whatever the exact percentage may be, this dump represents substantially less than one per cent. The decision was taken to dump this equipment, because the stuff was, prima facie, unsaleable. Whether it is unsaleable today, I do not know, but the fact remains that the radio industry would not handle it at that time, and my technical advisers agreed that it was unsaleable. What has happened afterwards, I will come to in a moment.

Even if we had been able to sell it, the sale would have helped to knock the bottom out of the market for more extensive sales of higher grade equipment which we had and for which we were legitimately trying to obtain a market. We had in fact £600 million worth for sale. In addition, it would have been far too slow and costly to break down the equipment in question for component parts, and that is another reason why dumping was decided upon. I have no evidence that the Radio Industry Council were specifically consulted about this particular piece of dumping. I am being perfectly frank with the hon. Member; but there is not the slightest doubt, that if they had been consulted they would have advised dumping, having strongly pressed us, as they did in general either to dump radio equipment or to hold it in general indefinitely in storage. As events have turned out, the market for radio equipment was more widespread and lasted longer than anybody, either the trade or my advisers, expected at the time.

Although prices have fallen somewhat recently, and the process of disposals has taken rather longer than was expected, I think it is likely that if this equipment had been held indefinitely in storage and gradually allowed to trickle into the market, it would have realised at any rate something. The hon. Member spoke about rotary convertors; he is quite wrong about that. There are various kinds of rotary convertors. I am not a technician, and I speak from advice, but I know that the kind he has mentioned are on sale at about 10s. and are a drug on the market. However, I will not quarrel with him and I will admit that possibly if the equipments which were dumped had instead been held all this time they might have fetched something. For that reason, since it became apparent that the market was greater than had been thought, the policy of dumping was completely suspended and nothing is dumped now unless there is some special reason why it should be and unless the Minister has personally authorised dumping. For all practical purposes that means that nothing is dumped nowadays.

Nevertheless, the decision which was taken at that time, the background of which I have now gone into very fully, was entirely reasonable at that time, and no responsible person dissented from it. It would have been vastly more damaging, so far as one can apply words of that kind to what after all were small transactions, if at a time when the space was needed more urgently for other purposes we had held great quantities of these stores permanently on the racks and in the bins in the hope that someone would buy them. I am advised that it would have been uneconomical to break them down. The hon. Member for Stone quoted many figures, but figures of that kind are entirely arbitrary. The circumstances of the time and other issues have to be taken into consideration. At that time the steps taken seemed perfectly reasonable. In fact the Ministry of Supply in dealing with this problem of surplus was doing nothing more than what would have been done by any large commercial trading organisation. The Ministry handled a vast quantity of goods and made a vast profit for the community. If it does that job it has to take legitimate risks. If the hon. Member for Orpington (Sir W. Smithers) and his friends were handling the sums of money which the Ministry of Supply were handling and did not take certain risks, I would be surprised.

Sir Waldron Smithers (Orpington)

If I had had my way the hon. Gentleman would not have been in a position to compete with private enterprise. I asked questions on this matter some years ago, and the matter tonight can be summed up in Kipling's words: A servant when he reigneth, Throws the blame on someone else.

Mr. Freeman

At any rate I plead guilty to the indiscretion of inflicting the hon. Member for Orpington (Sir W. Smithers) on the House at this time of night.

Sir W. Smithers

And the hon. Gentleman got it in the neck.

Mr. Freeman

Our action was a perfectly legitimate business risk. If hon. Members opposite or anyone else had had to deal with the same problem they would not have taken any different decision.

I want to make one quotation. There was a Debate in November, 1945, on what was one of the guiding considerations behind the disposal policy, namely, the urgent need for release of storage space. During that Debate the right hon. Member for West Bristol (Mr. Stanley) made these remarks: It may well be worth facing some monetary loss to the Treasury owing to deterioration of certain stores which have been disposed of when you put that against the greater loss to the nation by depriving trade, particularly export trade, of the use of floor space."—[OFFICIAL REPORT, 5th November, 1945; Vol. 415, c. 957–8.]

The Question having been proposed after Ten o'Clock on Monday evening and the Debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Four Minutes past Two o'Clock.