HC Deb 18 November 1948 vol 458 cc546-9
19. Mr. Walter Fletcher

asked the President of the Board of Trade whether he is satisfied that the safeguards against the sale of the strategic stock of rubber in America to American manufacturers, of which there have been a number of instances recently, will be sufficient in the future to stop the pressure that such sales exercise against the dollar-earning power of the rubber-producing industry in Malaya and elsewhere; and if, in the negotiations for the disposal of this stock, he considered representations either from the Rubber Study Group or from the producing and distributing associations, thereby avoiding a repetition of the error committed in this connection at Geneva.

Mr. H. Wilson

I am not aware of any recent sales from the United States strategic stocks of rubber except for the purpose of replacing deteriorating material. Such representations as we have received in the past from the producing and distribution associations were in favour of transferring Government trading stocks of rubber to a strategic stockpile. The Rubber Study Group is an Inter-Governmental organisation.

Mr. Fletcher

Is not the Minister aware that this stockpile of rubber is being made available for American civilian use on a rotation basis of every 30 to 45 days, which can have nothing to do with the deterioration of the stock, and that the effect is to produce many less dollars for the British Empire? Will he take the matter up through official channels to see that it is done in rather a different way?

Mr. Wilson

Sales which are made from the stockpile are, of course, replaced, and so the total volume remains the same, but if the hon. Member has any evidence that the stockpile is being used in such a way as artificially to reduce the price of rubber and therefore reduce our dollar-earning capacity, I shall be very glad to take it up with the United States Government.

20. Mr. W. Fletcher

asked the President of the Board of Trade to what extent the price at which part of the rubber stock held in this country and sold to America under the terms of the E.R.P. Agreement entailed a loss to His Majesty's Government, after taking into account storage, interest and insurance calculated on a commercial basis.

Mr. H. Wilson

The loss on the basis suggested by the hon. Member is estimated at about £750,000.

Mr. Fletcher

Can the right hon. Gentleman say why this loss was made when there have been many opportunities to dispose of these stocks beforehand in this country and elsewhere without making a loss?

Mr. Wilson

The reason this loss was made, as I think the hon. Member knows, is that much of this rubber was bought following the wartime Ceylon contract, which was at a very high price, and it is being disposed of at a lower price than the price enforced upon us by wartime conditions. If this rubber had been made available for current consumption, it would have had the effect of depressing the market, which would have affected our dollar-earning capacity.

21. Mr. W. Fletcher

asked the President of the Board of Trade how far the price at which a proportion of the rubber stock held by His Majesty's Government in this country was sold to the United States Government was below the Is. 3 13/16d. per pound at which it was available to manufacturers in this country; and whether manufacturers in this country were given the opportunity of buying this stock at the price at which it was sold to the United States Government.

Mr. H. Wilson

The rubber was sold on the basis of 22⅝ cents per 1b. c.i.f. New York for standard No. 1 sheet. Manufacturers in this country were not given an opportunity to buy the stock, but I am satisfied the market could provide quite as satisfactorily for their requirements.

Mr. Fletcher

Will the right hon. Gentleman say why the manufacturers in this country were not given an equal opportunity along with the Americans to buy this stock, and why, in view of the need to keep our goods at a proper price-level for the export drive, this method of depriving them of stock, which has been held in this country, at the same price as has been made available to America, was adopted?

Mr. Wilson

Had this been made available it would have had a depressing effect on the market, and it would undoubtedly have affected our dollar-earning capacity.

Mr. John Lewis

Is it not quite obvious that if rubber is sold to manufacturers in the United States at a lower price than to British manufacturers, it is quite impossible for British manufacturers to compete in the world markets with the United States?

Mr. Wilson

This was sold, not to American manufacturers, but to the American strategic stock pile.

Mr. Fletcher

Will the right hon. Gentleman see to it that, if there is any question of disposing of further stocks in future, manufacturers in this country will have an equal chance?

Mr. Wilson

No, Sir. I cannot give any such undertaking.

Mr. William Shepherd

Will the right hon. Gentleman say how, in a world of high material prices, His Majesty's Government can quote such low prices for materials over which we have some control?

Mr. Wilson

I am not sure whether the hon. Member is referring to the general low prices of rubber, or to this particular transaction. As far as the former is concerned, I think the hon. Member knows that the main reason why we did not get what many consider to be an adequate price for sterling area rubber is the large volume of synthetic rubber overhanging the market.