EXPORT TRADE CONTROLS (Hansard, 15 July 1948)

§ Mr. Geoffrey Cooper (Middlesbrough, West)

I apologise for detaining the House at this very late hour. Due to the difficulty in obtaining an Adjournment, and to the fact that I am trying to present certain difficulties which have been described to me by a number of people in industry, I feel I have a certain obligation to put the case even though the hour is advanced. We notice that Ministers continually give exhortations to the works in industry to increase efficiency and production in order to fill the export gap. I have taken this subject of steel controls and the export trade because I believe that though the steel workers are doing their best to raise the target to the utmost capacity of the industry, the way in which we are converting that steel into products for export is not being carried out in the best way to ensure the steel being used to the best possible extent in earning foreign currency.

I believe that the ever-increasing controls—and we find an increasing number of officials in many Departments—are themselves tending to cause delays rather than to smooth out the difficulties which industry is facing. They are, in fact, a new burden on the backs of the workers. It is the Government's policy to leave 80 per cent. of industry in private hands, and I believe that the Government should realise their responsibility to provide the facilities for this 80 per cent. of industry 1626 to carry on its business properly. I think the nationalised industries are getting Government help to the fullest possible extent. But from the information which comes to me from many industrialists, I am led to believe that the frustrations of industry are becoming well-nigh intolerable. The frustrations which the managements are feeling are spreading down to the workers who are finding hold-ups in industry because of controls which seem to have got completely out of control.

I am not alone in my opinion, because in this House recently hon. Members have brought forward cases similar to those which I shall relate. Recently we had a Debate, to which my right hon. Friend replied, dealing with the wiredrawing industry, and with the shortage of steel which it was experiencing. Then there was the question, brought forward by the hon. Member for Ipswich (Mr. Stokes), of the problems which industry was meeting in regard to the prices being charged for imports, and the prices being charged for exports. He indicated that the gap between the two was widening to an alarming degree. It is, however, no good trying to get good prices for exports if products are not being made available for export in the largest quantities which we can possibly supply from our resources. I raised on the Adjournment Debate on 22nd January, the general question of the way the Civil Service was operating the controls, and the adverse effect upon industry. This time, I want to give one or two specific examples: I have had to select these examples carefully, and I hope the Minister will not think that they are just isolated cases. I believe they are typical of the sort of problems which industrialists, by and large, are facing at present.

Before I give the examples, I would like to mention one point. It is that when my constituents, who are industrialists or exporting merchants, come to me with information, as they do from time to time, they ask me not to mention their names or products. They say that if they were to kick up a fuss they would stand to be victimised by officials in the Departments. I believe that the Minister uses his influence as far as possible to aid industry in every way, but when decisions are taken behind closed doors, and the firms affected cannot hear the arguments used in arriving at those decisions, they are naturally inclined to be suspicious of the decisions, 1627 particularly when they react against them. They feel there is a great possibility, if they cause trouble, that officials in the Departments may not, in future, be as helpful as they might be. They fear that victimisation may occur as a result of their having raised some matter through an hon. Member of this House. This is a very real point, and I am not, I think, exaggerating it. I hope the Minister will endeavour to dissipate this fear which exists in the minds of industrialists, if he possibly can, in his reply to the Debate.

As I see it, the Ministry of Supply's system of allocating steel has broken down. I know that when the present Minister took office he admitted that the system of allocations had broken down. I think that he has tried to remedy the matter; but the indications are that he has not succeeded in doing so. The Minister's endeavour to operate the controls entirely, or almost entirely, by officials, will fail, however hard he tries, because decisions and allocations are too frequently being made by officials who are not in close enough touch with industry; and who, in any case, have not the industrial background to enable them to make their decisions in the most intelligent way.

The first example I would like to quote is that of a forge in the north of England. It was represented to me that in one period alone they had some 1,500 tons of steel short of the allocation which had been given to them. I raised this matter in a Question which I had answered by the Minister on 31st May, when my right hon. Friend's reply was that he was satisfied that the system of allocating steel was fair and efficient. He added, however, that there must inevitably be a number of cases in which supply falls short of demand because of the limited amount of steel available. That, of course, I can understand, but what I cannot understand is that the supply falls short of the allocation, because if there is a consistent failure in this respect the system of making the allocations must be at fault. The firm to which I have referred, required 35 tons of a special type of steel; not a very large amount. It was needed to make agricultural implements, and the firm obtained from their colleagues in the industry information to the effect that the steel was available, although they were 1628 unable to get the actual steel delivered to them against their allocation. This was despite the fact that they had the Ministry of Supply allocation to quote as authority for obtaining the steel. As a result of their not getting this small quantity, it was necessary for the Ministry to sanction the placing of an order for importing a number of these agricultural implements at no less than three times the price for which they could have been made in this country. This is the sort of thing which widens, rather than narrows, the import-export gap.

A second example refers to another firm, again in the north of England. They specialise in making certain parts for prefabricated houses, and they specialise in making a certain part for a firm who are supplying the entire quantity of a certain type of prefabricated house. They obtained an order for a quantity of these houses, and, automatically, the other firm would have received orders for their specialised part. The firm designing the house then said, "We cannot place this order because we have been told that the Ministry of Supply have allocated a quantity of steel imported from Belgium to another firm. This firm will do half the order, and you will have to do the other half." Then later they were told that the whole order would have to go to the firm using Belgium steel. When the parts were made of the steel which came from Belgium it was found that they were unsuitable. The material was wasted, and the work which had been put into the steel was also wasted. These are the sort of difficulties which, as I see the matter, are actually introduced into the industry. It is, presumably, that officials at the Ministry are not sufficiently knowledgeable on their job, otherwise this kind of thing could be prevented.

There is a further source of difficulty which industrialists have brought to my notice, and it occurs because of the way in which the Ministry of Supply are supposedly co-operating with the Board of Trade. If a firm wishes to import a certain product they go to the Board of Trade for an import licence. If it is a technical component or a machine then the Board of Trade ask for advice from the Ministry of Supply's Production Panel to see whether that same product is or could be made in this country. That is a sensible procedure, but it is difficult for 1629 the manufacturer, when he cannot get a quick decision, to find out where the blame lies for the delay. The Board of Trade blames the Ministry of Supply, and the Ministry of Supply tends to blame the Board of Trade, and in between the two the poor industrialist gets rather a raw deal.

In some cases the allocation of import licences can be made within two weeks, but in some cases it is as much as six weeks, and I have two cases where the period has extended, off and on, over six months. There was a firm which wished to import a design of scales from Switzerland. There was no patent attached, but it was a design which would appear to have a good demand not only in this country, but chiefly in the Dominions and certain hard currency areas, to which this firm who wished to import these scales was already sending a considerable quantity of its products. All they wished to do was to obtain a sample to see if they could cost up the particular design, to see if it were worth proceeding with, and then obtain a sample quantity of 200 so as to try out the market not only in this country but abroad, before going into production.

Yet a decision was given against them, as I see it, on inadequate information or inadequate knowledge, which was in the hands of the official. Serious decisions of this type, which can affect the import and export trade of this country, need to be given far wider decisions when just one official can give advice that a certain import be stopped, and that advice, coming to the Minister, seems to weigh against all other considerations or representations made by industrialists or Members of this House.

There was another case of a piece of equipment which was designed in the United States. It seemed to have good market possibilities if made in this country and then exported to hard currency areas, and the firm obtained a tentative agreement actually to market this piece of equipment overseas. In this case it was necessary to obtain a certain piece of machinery from the United States to enable the machine to be made quickly. The total cost involved, both in royalties and for the special part, was 125 dollars on each, and each complete machine would fetch, on selling, £300 or £400. This comparatively small allocation of 1630 dollars was the cause of the project being turned down The Ministry of Supply, in a letter, stated, "At this stage of affairs we would be unable to recommend the import of components from America." It is also stated in the letter that comparable machinery was available in this country. The official who made that statement really could not have known the facts, because if it were comparable it would be infringing an American patent. If not, it would not be suitable for this particular job, and it would not do this job as efficiently.

Here, once again, we come up against the real fears and difficulties of industrialists when they put forward schemes. They go to tremendous trouble. In this case the individual who got a special agreement to manufacture these particular machines travelled in America and spent the 3,000 dollars which was allowed him by the Treasury, and then the project was turned down. This is the sort of thing that these industrialists are up against. They go to tremendous trouble: they know from past technical and commercial experience the possibilities of certain types of equipment. In the end, that product was turned down by an individual who, seemingly, was acting in that most arbituary way and on the information before him. These arbituary decisions seem to be incapable of being altered by the representations of the manufacturers.

I want to give my hon. Friend an opportunity of replying to one or two of the cases I have given, and there are many other cases I could quote. I will quote one more, which is of special significance. It is that of a firm that makes special pieces of steel equipment for the Post Office and for export. They had an order which they received from a dog-racing track and they turned it down because, naturally, they wanted to fulfil Government orders or to export, and they felt that this order was a matter of no real importance. Within a few weeks, the dog racing organisation was able to obtain a priority order from the Ministry of Supply. On the other hand, they were not able to get the help of the Ministry of Supply in obtaining machinery with which they could increase their capacity; they could get no help from the Ministry in extending their factory and getting the Ministry's blessing so that they could obtain the necessary materials with which this extension could be built. These 1631 further instances are, I hope, sufficient to show that industrialists at large are up against real difficulties and that in many cases they are not getting all the help from the Departments that they should get. What is being done is going right against all the endeavours which these firms are making to expand their export trade.

§ The Joint Parliamentary Secretary to the Ministry of Supply (Mr. Jack Jones)

I regret that the hon. Member for West Middlesbrough (Mr. Cooper) should have taken so much time and asked so many questions and left me so little time for my answers. We have had a Debate on the question of whether people are guilty or not guilty of offences and to all the offences with which the Ministry has been charged I plead not guilty. I do, however, plead guilty to exhorting the workers to work, and I am happy to know, and I am sure the House and the country are happy to know, that there is today, under a Socialist Government, a greater demand than ever by producers for materials which they wish to work upon.

It is remarkable that the hon. Member seems to have a constituency extending all over Britain. One would have expected that these complaints would come to me through the Member responsible for the constituency in which the firms are situated. I do not complain of that, but it is a remarkable coincidence that the complaints have come from all quarters. I have some knowledge of industry, especially the steel industry, and I know that it is a physical impossibility to meet all the demands for steel out of present production. It is a happy thought that the men I have the privilege of representing in this House are, at this moment, trying to beat last month's record steel production, which was an all-time record for Britain, but, despite that, it is impossible to meet the demands of all industrialists.

The question of scales has been mentioned. It does not follow that because Switzerland would wish to send to this country scales that look very nice—and that was the main attribute of this particular set of scales—we should give sanction for them to be brought here. Our mission is to see that the production of steel and anything else in this country 1632 with which we are concerned shall be used by our own people in the interests of our economic recovery. We are against any article coming into this country which we can produce ourselves. There are many reasons for this: We want to keep our own people employed. We want to restrict, as far as possible, the waste of even one dollar; goodness knows, they are scarce enough.

I know the forge in the north of England. I know it as well as I know the back of my own hand. I was born in the town where it is situated. High silicon steel of the type required there is most difficult to make. It is not the fault of the Ministry of Supply that there was sufficient production further north in the Middlesbrough area that this forge might have had; it is a matter which private enterprise has within its own control. There is no evidence that we are preventing that type of steel from reaching that forge. I know some of the difficulties of private enterprise. I know something of the idea of private enterprise of creating steel of a higher conversion value rather than making other steel that may be in the best interests of the nation. Private enterprise is not the paragon of all the virtues, as the hon. Member for Middlesbrough would suggest. The solution to many of the problems is in their own hands. I have had information and, after most careful inquiries, I am satisfied, as a practical man—not as a theorist, with no background—that some of the suppliers of some of our most urgent needs are not doing all that they might. I do not accept the allegation that we are responsible.

The supply of poles for a dog-racing track has been mentioned. If my hon. Friend—I consider him my hon. Friend—would look carefully into this problem he would find that the allocation of poles to a dog-racing track is a question for the Ministry of Works. It does not come within our purview. If poles were used wrongly for the lighting of a dog-track then someone in that area, having got steel for another purpose, broke the law. I am inclined to suggest that when this information is passed to the appropriate Ministry there will be an investigation, involving the persons concerned. Other allegations have been made. I wish at once to refute the suggestion that the officials in my Ministry are not up to their jobs. I have had the opportunity of 1633 meeting these people hour by hour and day by day, and of assessing their real value. I can assure my hon. Friend that I have been more than pleasantly surprised at the technical and industrial knowledge possessed by the men concerned with these problems. They are selected and used as specialists in the Departments, dealing with the various sections of the industry for which we are responsible. It is only fair that this should be said here if the allegations which are made here against civil servants were made outside they would have an opportunity of defending themselves. The suggestions which have been made are absolutely without foundation.

Certain industrialists have been mentioned. I have had an opportunity of finding out what their attitude has been to various problems. I have had the opportunity of meeting them on the spot. To suggest that we do our business behind closed doors, and that the industrialist is afraid of victimisation, is just sheer nonsense. Any industrialist can come to the Ministry of Supply. The doors are ever open, at all sorts of weird hours, for industrialists to be received by courteous people who are prepared to help. I made a statement at this Box last week which I should like to repeat—that our job is to help industry and to try to prevent the bottlenecks to which my hon. Friend has referred. It is physically impossible to give 1634 everyone in the country all they need. We try to allocate our materials in the best interests of the nation with the "let's get rich" persons last. There is a good bit of that going on. We try to prevent those who would wish to use the present steel stringency for their own gain from getting large profits.

If instead of taking notice of these industrialists, and writing on their behalf—which appears to be the case—my hon. Friend would bring them along to the Ministry we could consider our differences across the table. I can give this personal guarantee, that I will do all in my power, as I am sure will my right hon. Friend, to iron out their difficulties. Last week I said we want to be looked upon as the friends of industry. We are most anxious to see that the allocations of steel are placed where they will be used in the best national interest. I regret that it is not possible to give to all all that they need. There is no Member of this House, no civil servant and no official, who has got all he needs. I can give this guarantee, however, that having regard to the international position we will do our best to satisfy the people who appear to send complaints ad lib to my hon. Friend, and remove their complaints as far as is possible.