HC Deb 23 November 1948 vol 458 cc1202-5

Resolution reported: That, for the purposes of any Act of the present Session to provide, amongst other things, for the establishment of an Iron and Steel Corporation of Great Britain and for defining their functions, and for the transfer to that Corporation of the securities of certain companies engaged in the working, getting and smelting of iron, ore, the production of steel, and the shaping of steel by rolling, it is expedient to authorise—

  1. (a) the payment out of the Consolidated Fund of such sums as may be required to fulfil any guarantee by the Treasury of the principal of and interest on stock issued by the said Corporation or the principal of and interest on moneys temporarily borrowed by the said Corporation or any publicly-owned company (within the meaning of the said Act), so, however, that the amounts out standing in respect of the principal of the stock so issued for the purpose of the exercise of the Corporation's borrowing powers and in respect of any moneys temporarily borrowed as aforesaid do not at any time exceed the sum of three hundred and fifty million pounds, excluding amounts out standing in respect of stock issued or moneys temporarily borrowed for the purpose of redeeming stock or repaying moneys temporarily borrowed;
  2. (b) the payment out of moneys provided by Parliament of—
    1. (i) subsidies to the Corporation in respect of amounts by which the total cost of imported iron and steel and other imported materials acquired by the Corporation exceeds the price at which they are sold in Great Britain;
    2. (ii) remuneration and allowances to, and expenses of, stockholders' representatives appointed under the said Act;
    3. (iii) fees and allowances to any referee or board of referees appointed under the said Act to decide questions relating to pension rights or compensation of or in respect of officers, and allowances to witnesses appearing before any such referee or board;
    4. (iv) remuneration and allowances to members and officers of the arbitration 1203 tribunal appointed under the said Act and to persons to whom proceedings are referred by that tribunal; and any other expenses of that tribunal;
    5. (v) the administrative expenses incurred under the said Act by any Minister of the Crown or Government department;
  3. (c) the payment into the Exchequer of any sums received by any Minister of the Crown or Government department under or by virtue of the said Act."

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

10.1 p.m.

Sir John Mellor (Sutton Coldfield)

I want to ask a question on this provision of the Resolution that it is expedient to authorise— (a) the payment out of the Consolidated Fund of such sums as may be required to fulfil any guarantee by the Treasury of the principal of and interest on stock issued by the said Corporation. I was glad to learn from the Minister of Supply last week that the stock to be issued will be a dated stock. That, at any rate, is something, but there is a further point which I want to raise. A dated stock means that it is to be redeemed by a fixed date, and it is very important that, where a guarantor guarantees a redeemable stock, he should know something about the arrangements being made by the person, whose obligations are guaranteed, for the due discharge of those obligations.

I want to ask, in this particular case, what provision there is for a sinking fund so as to ensure that, by the date of the maturity of the stock, there will be sufficient funds available for its redemption. I want to know what provision is to be made for the amortisation of this stock. Or is it that no such provision is to be made, that no sinking fund is to be provided? In that case, of course, the Corporation would have to re-borrow in order to redeem at the date of maturity. I feel that it is a matter of fundamental importance, and I am glad to see that the Minister of Supply is taking advice on the matter. In order to give him time, I shall raise another point, and I hope that, by the time I have finished, he will have obtained the answer.

I am sure the House will appreciate that it is very important that, as the Treasury is guaranteeing not only the interest but also the principal of the stock, the House should know what provision is being made by the Corporation to set up a sinking fund to secure redemption at the due date, without making any call upon the Exchequer to assist them in the discharge of this obligation.

The other point I wish to raise arises under paragraph (b), where it is stated that it is expedient to authorise— (b) the payment out of moneys provided by Parliament of— (i) subsidies to the Corporation in respect of amounts by which the total cost of imported iron and steel and other imported materials acquired by the Corporation exceeds the price at which they are sold in Great Britain. Why has it been necessary to put that provision in this Resolution? In the case of the corresponding Resolution appropriate to the Coal Industry (Nationalisation) Bill, there was no such provision. I understand that the Coal Board imported considerable quantities of American coal, but that the coal was sold at a loss, and that the loss was borne by the Coal Board and not by the Exchequer. I want to know why, in this case, it is proposed that any loss made by the Corporation on importing steel should be borne by the Exchequer by means of a subsidy. Further, I want to inquire whether, if the Corporation makes a profit on the importing of steel and other materials, that profit is to be retained by the Corporation or is to be surrendered to the Exchequer. I should be very grateful if the right hon. Gentleman would give me a reply to those two questions.

10.6 p.m.

The Minister of Supply (Mr. G. R. Strauss)

The hon. Member for Sutton Coldfield (Sir J. Mellor) has asked me two questions which I hope I can answer satisfactorily. First, he asked what provision there is for amortisation or sinking fund in regard to the compensation stock to be issued. He will find that fully set out in paragraph 3 of the Seventh Schedule, page 71, of the Bill. I do not want to read out the whole of the paragraph because it is rather lengthy, but it is stated there in considerable detail what arrangements will have to be made for amortisation of the stock.

The second question he asked was why it is necessary to provide for a possible subsidy in respect of imported steel or other materials for the iron and steel industry. As the hon. Member knows, a subsidy is being paid by the Government at the moment in respect of these imports. It was thought desirable to put a provision in the Bill under which the Government might, if they so desired at any time, either continue such subsidy or impose such a subsidy in the future. It does not mean that the Government will do so, but it might be found desirable—as it is desirable at the moment—to pay a subsidy in respect of these imported materials which are bought above the British-controlled price in order to help the British steel consumer in the same way as is being done at the moment. In order to enable that to be done if necessary, that provision is made in the Bill, but I want to assure the hon. Member that it does not necessarily follow that such a subsidy would be paid.

Mr. Charles Williams (Torquay)

I have no intention of taking up the time of the House on this matter, but I must say, in spite of the explanation we have just had from the Minister, that I am not in the least satisfied with this Financial Resolution. The fact that it is not going to be voted against does not in any way permit me on behalf of my constituency to approve expenditure of any kind which I think is wrong.

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.