WIRE DRAWING INDUSTRY

HC Deb 30 June 1948 vol 452 cc2331-40

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

10.0 p.m.

Mr. Martin Lindsay (Solihull)

After the solemn and sombre Debate to which we have just listened, it is rather an anti-climax to have to descend to the more mundane consideration of the wiredrawing industry. This industry is suffering from difficulties which are serious, which have been going on too long and the amelioration of which will be of benefit to the economic position of this country.

There are two questions involved, first, the total allocations of steel for the rod rollers who supply the wire drawing industry; and, secondly, the distribution within the industry of what steel is available. Correspondence and Questions in Parliament have revealed, I regret to say, a lack of knowledge on the part of the Minister which is unfortunate. For example, when asked on 1st March whether he would make available increased supplies of wire rods to the wire drawing industry, the Minister in the course of his reply said: New rod making capacity is being provided as part of the industry's modernisation plans, but there will be little substantial production of this before 1950."—[OFFICIAL REPORT, 1st March, 1948; Vol. 448, c. 10.] To have implied that the wire drawers are short of raw material because rod rolling constituted the bottleneck is most misleading and entirely untrue. The fact is that several companies have installed new continuous rod rolling mills during and since the war, which are far from working to capacity owing to the shortage of steel supplies, while owing to the maldistribution, to which I have referred, some other high cost mills, one of which is over 50 years old, is not only working to capacity but is having to work overtime in addition. Again, writing to me on 7th May, the Minister said: Adjustments are being made all the time to direct the flow of steel through the various manufacturing stages to where it is most needed, but this is a very complex business, and changes cannot be made too rapidly. It is all very well to say that changes cannot be made too rapidly, but this is no new situation which has suddenly arisen. This maldistribution has, in fact, as I am sure the Minister will agree, been going on since the end of the war. The fact is that many other sections of the steel industry are relatively far better supplied than the wire industry, which has received no benefit whatever from the increased home production of ingots.

If I may, I should like to take the home trade as an illustration of what I mean. It is a fact that bedding manufacturers can get all the angles which they need, and are building up stocks, which will be of no use to them unless they can get increased supplies of wire. Exactly the same story comes from the bucket industry, where we find no shortage of steel sheets for making the buckets, but they need that little extra bit of wire which is used to reinforce the rims. Another classic example of the wire shortage is provided by the cable industry. It is a fact that there are literally thousands of drums of cable lying in store awaiting the necessary sheathing wire. These are instances which clearly show that maldistribution is taking place between the various sections of the steel industry. It would seem another case of the muddle of planners, whose performance falls short of their promise, and whose preoccupation with nationalisation is, I fear, blinding them to the facilities provided by private enterprise, which is not allowed to be fully employed. I believe there is a very great need for a diversion of steel from other sections to the wire industry and that such a diversion would be in the national interest.

Having just mentioned the home trade let me now turn to the export trade. There we find the same situation. Table 19 of the Monthly Statistical Bulletin, published by the Iron and Steel Federation, provides a comparison of the average monthly output of the various steel products in 1938 as compared with the first four months of 1948. One finds that exports of the various steel products have increased to a substantial degree, whereas wire manufacturers are unable to approach the 1938 figure. For example, the average monthly export of bright steel bars was approximately 500 tons in 1938 and it has increased to 2,200 tons on the average of the first four months of this year. Similarly, other steel bars and rods have increased from 8,500 to 9,100 tons. Yet wire carries a higher conversion value than either of those classes of product.

I hope that the Minister, whose speeches upon the problems of the national economy have earned the respect of the whole nation, will, when he replies, be able to tell us why the export of such low exchange-value steel products as bright steel and other bars, angles, shapes, sections and sleepers, are permitted at substantially above pre-war levels, at the expense of more finished steel products such as wire, which is being exported at considerably below the pre-war level. I hope that the Minister will give us that information and the assurance that he will reconsider both the total volume of steel allocated to rod rollers and the distribution within the industry of the steel which is allocated.

10.8 p.m.

Mr. Erroll (Altrincham and Sale)

I am indeed glad to have this opportunity of drawing attention to the difficulties confronting the wire-drawing industry. Before proceeding further, and in accordance with the custom of this House, I should like to declare my interest in the industry. I am associated with one of the leading firms of wire manufacturers in this country and my information is therefore based largely upon their experience.

I find it difficult to understand the Government's policy in this connection. In compelling the steel industry to concentrate on tonnage production, regardless of quality, and tonnage exports, again regardless of their export value, the wire industry has gone extremely short of available steel supplies. Exports of wire, as has been pointed out by my hon. Friend the Member for Solihull (Mr. M. Lindsay), are running at less than the pre-war rate, whereas exports of lower valued steel products are running at a much higher rate than before the war. The figures are there in the bulletin of the Iron and Steel Federation. I am sure my hon. Friend opposite—and I call him a friend—will agree with me that wire has an indisputably higher exchange value than the comparatively low-grade steel products which we are exporting in greater abundance than before the war. It just does not make sense.

In the home trade as well we are finding that there is something approaching a glut of angles and sections in the more popular sizes. Steel makers' salesmen are going round touting for orders in the Midlands, although His Majesty's Ministers are complaining of the steel shortage. They are touting for orders because of the faulty Government system of steel allocation. The Government's insistence on tonnage production regardless of what is really required has caused this confusion and this maldistribution. It is far more serious than any domestic inequalities of distribution and stock holdings. It is in the export trade that the problem is so serious. We are losing very valuable export business at the present time through the difficulties which the wire drawing industry is facing. I was fortunate enough to visit Sweden a few days ago, and there I learned, although that was not part of my business, that the British cable-making industry had lost a very valuable order for high voltage cables to France and to Italy because British cable makers were not able to supply the cables in good time. As my hon. Friend has already pointed out, British cable makers are faced with a very serious problem in regard to armouring wire for armoured cables.

To move from the far North to the far South, in New Zealand we see a simi- lar situation. Only this morning a letter has arrived in this country describing what has just happened in New Zealand. This letter says that four weeks ago an area of New Zealand suffered the worst flood in living memory. The fences were down for miles around and areas were flooded out. The relief committee which had been formed can muster only 80 coils of wire to replace the fences which have been destroyed. Fancy, in one of our Dominions they can muster only 80 coils of British wire to put right flood damage. The letter goes on: We are a loyal country and one of the biggest sources of the supply of food. The writer could not help feeling that New Zealand was having a raw deal because he could not get the wire supplies which he so urgently required to develop farms and properties in New Zealand which would benefit ourselves.

To quote another Dominion, one is faced with the determination of South Africa to set up a wire-drawing industry of their own because they cannot get supplies from Britain—supplies at the very time when other steel exports are bigger than they were before the war. Our Dominions cannot understand this when they read of steel production in Britain being at greater levels than ever before. Why, they say, is wire production below the pre-war level as far as exports are concerned?

It is almost as serious in the home trade as it is in the export trade. It is not just a matter of supplying wire, as the Minister will agree, but a matter of the quality of the wire. Take spring steel wire, for example. Several of our leading motor car manufacturers are in dire straits through bottlenecks occurring over very small tonnages of vital spring steel wire. One maker of steel springs has had several letters in the course of the last four weeks. One was from the biggest motor manufacturing company in this country saying that their production lines would be stopped and the men dismissed if they could not get the spring steel wire supplies which they required. It is just as bad as that. These suppliers are getting wire, it is true, but they are getting wire of the wrong quality. They only require a few tons a month, but it is of the wrong quality.

I submit there is something seriously wrong with the system of allocation of steel supplies. We know there is an overall shortage but let us at least ensure that the supplies which are available are wisely and sensibly distributed. One firm of wire drawers were actually no less than 1,600 tons of steel down on their paper allocation in the month of April alone. No wonder the Government do not publish the steel allocation figures: they know that their allocations do not mean a thing, if a humble wire drawer can be as much as 1,600 tons down on the allocation figure for a single month.

The Government as I submit, are allocating steel wrongly. A comparatively small additional tonnage for the wire industry, and of the right qualities for individual firms—because that is just as important as tonnage allocation—could remove some of the worst bottlenecks in the engineering and allied trades today, and it could secure the most valuable export markets which we require. Steel at present exported in simpler forms, could yield much more foreign exchange if sent abroad in the form of wire. Of course, the Minister will be entitled to ask me, do I know where the trouble lies? I will put one or two possible solutions to him. First, I can assure him that there is no shortage of rod rolling capacity—

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

indicated assent.

Mr. Erroll

I see that the Minister nods in agreement. There is no shortage of billet rolling capacity, and there is no shortage of steel in the quantities required for this industry, because the export figures show that one could quite well divert a little steel from certain low-grade exports to supply the needs of the wire industry. I suggest that there is really no reason why the system of allocation should not be revised to ensure a better export quota and a better export allocation for this essential industry. Finally, I hope that any improvement in allocation which the Minister may be able to announce tonight will be permanent, so that supplies run on a permanently higher level. Anything less will be but a temporary palliative.

10.18 p.m.

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

I should like at the outset to thank the two hon. Members who have spoken on this matter for the kindly and courteous way in which they have put their case and especially for the kindly reference to the effort that, as an individual, one makes to bring about the economic recovery of our nation. As the hon. Members know, there is an over-all world shortage of steel, and to try to compare present-day conditions with what wire drawers, and those who pull wires to get additional supplies of wire, had before the war is, of course, a difficult thing to do successfully.

I am hoping that nobody in this House will accuse the steel industry of not doing what it can to produce steel for all purposes, and I am just as certain as I stand at this Box that if we tomorrow or, indeed, today, were to divert certain types of steel away from certain industries to accommodate the wire drawing industry some hon. Member, either on the other side of the House or on this would be claiming the Adjournment to put a similar case for the industry which suffered because of that diversion.

Hon. Members opposite, of course, know the national position. They know the international position. There is capacity for rod rolling, there always was, but one cannot roll the rods without the billets to roll them from. The continual cry for more and more material, with which our people wish to work, is an indication of a successful Socialist administration. I remember the time when, as a very humble but very successful maker of specialist steels, I was not allowed to go to work to produce steel; that was in a world crying out, as it is today, for more and more. This may be beside the point but it is connected with the present-day case.

Hon. Members opposite know as well as I do that there are two different types of firms involved. One is the integrated firm, which rolls its own billets and produces its own ingots. It is absurd to suggest that the Government actually allocate the amount of steel to the individual firms. Industry itself allocates the amount of steel required. As a man who has spent the whole of his working life in the steel industry, I know there is a lack of synchronisation. In some places it may be said that certain industries should have more, and other less. This cry comes from all the users of steel. It is a coincidence that only this afternoon I received a letter from a man with whom I once worked. He is not a steelworks owner or a trade union official, but an ordinary workman. On behalf of his mates in a works where I had the privilege and the honour to be employed for 32 years—one of the finest in the country, judged by its record—he was complaining that in his works—producing steel pit props—his men can work only four shifts out of a possible 17. He blamed this state of affairs on to the fact that his firm was devoting its production to rolling mill billets. The hon. Member for Altrincham and Sale (Mr. Erroll) knows of the works to which I refer.

On the one hand, complaint is made in the House against the Government for not diverting sufficient quantities of rods or billets to the right places. On the other hand, the artisan complains that we are devoting too much to certain works and causing unemployment for four days a week, because of which the men are sent into labouring work for less money for the rest of the time. Hon. Members opposite may complain that we are not importing the amount of steel we used to import. Of course, we are not, and we cannot import all we would wish. The position of other countries is like our own: the internal domestic demand is greater than the internal output. Part of our troubles is due to our no longer being able to buy from abroad the amount of rods we bought before the war. Hon. Members complain that we are exporting certain quantities of steel—

Mr. M. Lindsay

Of lower conversion.

Mr. Jones

—of lower conversion value. In a world of bilateral and conditional agreements, it is possible that we are bound by agreement to export what may appear to be a low conversion article to get the vital necessities from which we make our steel. We are no longer in a position to dictate our import policy. We would, if we could, buy more rods to satisfy the capacity of our industry.

Mr. Erroll

This situation prevailed before the settlement of the bilateral agreements, which have apparently resulted in a disastrous state of affairs, although it was said to exist even before the time of the agreements.

Mr. Jones

If the agreements are wrong, no doubt something equally wrong was done prior to their completion. I shall never claim that this is a perfect Government. Even if tomorrow we had a better Government than that of today, it would not be perfect—that is logic. Hon. Members opposite complain that the capacity for rolling rods is greater than the capacity to produce the steel to be rolled, and that buckets, for instance, are being unnecessarily produced. If I may offer a humble suggestion, it is of no use providing a farmer with double wire fences with which to enclose his guaranteed T. T. herds if afterwards he finds himself short of the necessary material with which to milk the cows and so obtain the milk for which school children are waiting. It is all a matter of balance, of diverting the right quantities into the right places. Hon. Members opposite know that that is a difficult proposition. I wish to assure hon. Members opposite that we are not as unmindful of these facts as they appear to believe. We know of these complaints, because they arise day by day. What hon. Members opposite are advocating is more control rather than less—

Mr. M. Lindsay

Better.

Mr. Jones

I would not accept that there could be better control. We have an industry in which practical men are meeting individual concerns and individual members of the industry and doing what they can to give fair answers to fair questions. We cannot do better than that. There are difficulties which are very hard to deal with. It is alleged that we have not given the industry the same amount of steel as heretofore. That is absolutely incorrect. In 1938 wire rod production in this country was 439,000 tons which is a percentage of the overall steel production of 4.2. In 1945 wire production was 556,000 tons, a percentage of 4.7; in 1946 it was 634,000 tons, a percentage of 5. That was a steady but gradual increase. In 1947 it was 628,000 tons—that was a period when steel works had to close down owing to the blizzard; when coal production was interfered with and there was a recession which was no one's fault. The percentage was 4.9. In the first quarter of this year, production was at the rate of 736,000 tons, which maintained the percentage of 4.9.

Mr. Erroll

rose—

Mr. Jones

I know what the hon. Member for Altrincham and Sale is going to ask. The wire drawing industry is getting a percentage increase of the increased total production of steel in this country, and no one could ask for more except at the expense of some other industry. If hon. Members opposite can give any indication of wrongful use or storage or stocking of billets which is against the interest of firms they have in mind, I am ready to investigate.

Mr. Erroll

rose—

Mr. Jones

The hon. Member has had two bites at the cherry and cannot have another, although I know cherries are plentiful at the moment.

Mr. M. Lindsay

That is not a very bright one.

Mr. Jones

It is brighter than it was under the Tory Government. If it is any solace to the hon. Member to know, we have been promised 8,500 tons of wire rods by Belgium and Luxemburg in the near future and we are hoping for more hard steel rods from Sweden. Sweden exports specialised steel and imports mild steel. We are further hoping that France will be able to supply 6,000 tons of billets in the second half of this year and possibly 500 tons of rods.

At the Ministry we wish to be looked upon not as the enemies of production, nor of the wire drawing industry. Our job is to make it possible to give every section of the industry a fair allocation of the over-all production of steel. That is running at a higher rate than ever in the history of this country. Peculiar as it may seem under a Socialist Government, we are producing more steel under difficult international and national conditions than ever before in our history. If any friends of the hon. Members have any immediate troubles which we can help solve by acting as their friends rather than their enemies, if hon. Members bring those troubles to our attention we will do everything possible to help, as we are just as much concerned with our economic recovery as are the Opposition. We wish to use the over-all production in the best interest of national recovery and least of all do we wish to injure the wider interests of the country.

Question put, and agreed to.

Adjourned accordingly at Half-past Ten o'Clock.