§ Question again proposed "That this House do now adjourn."
§ 11.30 a.m.
§ Mr. Summers
I was drawing the attention of the House to the very grave warning given by my hon. Friend the Member for Bury and Radcliffe as far back as 26th July last, which I should like to quote to the House. After reviewing the situation as he saw it in respect of raw materials, he said:I am forced to the conclusion that our position today is incomparably worse than that in 1939. We are consuming almost double the rate of raw materials—not quite so much in food—that we did in 1939, and yet our stocks of at least a considerable number of these raw materials are not equal to those of 1939.He went on to say later:I want to be reassured that some plan is being worked out so that we can obtain and deny to others, if that can be done without going too far with sanctions, those materials without which in war-time armies sooner or later come to a stop."—[OFFICIAL REPORT, 26th July, 1950; Vol. 478, c. 608 and 609.]That was in July.
I want to read to the House the corresponding opinion expressed by the Prime Minister on 12th September—the occasion when the House was given the details of the large rearmament programme which had recently been announced to the country. This is what he said:As to raw materials, it is not considered that there should be any serious shortages, but I would make a special appeal to all concerned in industry not"—I should like to emphasise the word "not"—to increase their stocks beyond their actual needs."—[OFFICIAL REPORT, 12th September, 1950; Vol. 478, c. 968.]On the following day the Chancellor said very much the same thing.
Was ever facile optimism more misplaced? In the face of the position which I described earlier, how can anyone have any confidence in those who are responsible for our affairs, if within three months the forecast of our difficulties is so completely nullified by the events with which we are all familiar at the present time? Not only did they then announce that they did not themselves intend to do anything about the future of raw materials, 1480 but they said it would be wrong if anyone else attempted to do so instead.
There is a tendency in some quarters to attribute our position to the stockpiling policy which has been prevalent in America. I say quite emphatically that if in this country the Prime Minister makes plain that there are no difficulties, why should we blame any other country which takes a contrary view and follows its own methods for providing itself with adequate supplies of raw materials? The war in Korea started in June; Parliament was summoned in September to discuss rearmament plans decided upon in August. Yet, so far as I am aware, before November, if not indeed December, little or nothing effective seems to have been done to make provision for an orderly apportionment of key materials.
On the international side, here again it is not as though warnings had not been given. My right hon. Friend the Member for Aldershot (Mr. Lyttelton), speaking in this House on 18th September, said:The time seems long overdue in many cases when we should set up some kind of clearing house or combined resources board amongst the rearming countries to prevent a scramble for scarce supplies."—[OFFICIAL REPORT, 18th September, 1950; Vol. 478. c. 1560.]Yet apparently no notice until very recently has been taken of these quite precise warnings that have been given. The Government stand condemned of the total absence of foresight in this matter. The position would not have been anything like as serious as we now find it to be, if they had taken adequate steps earlier to deal with it.
I am well aware in recommending international planning in this sphere, that the conditions are not the same as those which prevailed during the war; and it is not to be expected, even when such machinery as seems necessary is set up, that there will be the same effectiveness resulting from it. During the war the ability to bring into operation the Navicerts in the matter of shipping, was an immense reinforcement—indeed, possibly an indispensable reinforcement—to the plans of those who were dealing with the subject of combined resources. Nevertheless, in spite of the absence of that advantage which then existed, I think that an attempt must certainly be made. The position will not right itself, and as 1481 rearmament grows, there is no doubt that this problem will correspondingly increase.
Since the situation has got so bad, it may be found necessary to introduce a measure of control of scarce raw materials. But, wherever possible, let such arrangements be administered by those in industry who are familiar with the facts, and let those arrangements be as flexible as they can possibly be made. First of all, before that is deemed necessary, I beg the Government to look at this problem as one of the utmost urgency on an international plane. I beg them to treat the matter as one of the highest urgency and importance. If they fall down again on this responsibility, no efforts from industry and no sacrifices from civilians will make good the damage they will thereby do to the safety and well-being of the people of this country.
§ 11.38 a.m.
§ Mr. Yates (Birmingham, Ladywood)
The hon. Member for Aylesbury (Mr. Summers) has raised a most vital matter, and it is right that it should be raised. Where I think he has failed is not in calling attention to the very serious difficulties that exist, but in his attempts to assess the responsibility for those difficulties. I was interested when he said that the Government had failed to do their duty in strategic planning. This Government has not been in power very long. I can remember the General Election, which is not so very far back, when the Tories were fighting against all the planning and control which we on these benches have maintained are so vital and necessary.
When the hon. Member for Aylesbury used the words "if it is necessary to have a measure of control" it indicated to me that he had not understood what vital control really is necessary. Still, he is coming along a good way, and our American friends are also realising the necessity for control. I do not know whether the hon. Member read an article in the "New York Times" of 10th December, in which these words appeared:Scarce raw materials pose complex problem. U.S. and Britain agree on a system of allocations and controls.This article was written by Felix Belair on 10th December, and it was special to the "New York Times." He referred to 1482the scramble for commodities that has been going on more or less intensively since the invasion of South Korea.Therefore, it seems to me to be absurd to talk of something having gone on over a long period, when, in fact, it has come about very recently.
§ Mr. Summers
Does not the hon. Gentleman realise that he is quoting complete confirmation of the view which I expressed, that five months ago the scramble was beginning and only now is anything being done about it?
§ Mr. Yates
An intensive struggle has obviously been going on in the last few weeks. The point is that we on this side of the House have always maintained that we must have certain controls, but the right hon. Member for Woodford (Mr. Churchill) and his supporters have said, "Set the people free." Their demands, all the time, are for us to take away controls, and now we are getting the suggestion from America that to make raw material controls work effectively they must be accompanied by a whole set of subsidiary controls on foreign trade and the internal economy.
§ Mr. Oliver Lyttelton (Aldershot)
Perhaps I can help the hon. Gentleman in the development of this argument. I would remind him that conditions in war or near-war are entirely different from those which obtain in peace time. That will perhaps help him in the argument.
§ Mr. Yates
I agree that when we are at war or approaching war, they are somewhat different. I understand that hon. Members opposite are prepared to agree to a measure of strategic planning only when there is either a war or the prospects of a war. [HON. MEMBERS: "Nonsense"] Therefore, we have been asking that there should be control.
I want to dwell upon the discussion of this matter which is so vital to a city like Birmingham, to the whole of the Midlands and, indeed, to the economy of the country, and I want to pose one or two questions to my hon. Friend on this matter. I put a Question to the Minister a few days ago in which I asked whether it was necessary to introduce a system of allocation to firms so that manufacturers would be given adequate notice in which to plan. Manufacturers are faced with a grave situation of possibly having to close 1483 their factories entirely. That is a serious matter to which I ask the Government to Pay the most serious attention.
I received a telegram the other day:If unable to obtain supplies of Mazak zinc alloy for manufacture of motor car components immediately, will require to give notice to 250 employees.This was a very serious matter, and I at once went to the Minister and told him that in the City of Birmingham, in a constituency which is the centre of a very large number of large and small factories, it would be a very serious situation if a factory must close. I am very grateful to him for looking into this matter, for within 24 hours he was able to introduce a system of special allocation to enable the Imperial Smelting Corporation to make an allocation to all their customers so that for the month of December they would be all right. All these firms were very grateful for that action. Never let it be said that the Civil Service cannot work within 24 hours, because they can. We have to try to get these matters dealt with quickly.
I would remind the Minister that if a factory has to close down, even for a limited period, it is a very serious matter. In this particular case, it meant that, unless some action was taken, the factory would have to close down until March. If that happens, a firm loses its team of valuable skilled men, and that, of course, is a serious matter. I went over this factory a few days ago, and I realised that if it suddenly had to close down, the manufacturer would lose some of the most skilled men in the tool room and probably would not be able to get them back. Therefore, I ask the Minister to say that there shall be some system so that factories will not be brought to a close, and that if there has to be rationing, it will be done on a very careful basis so that firms will be safeguarded.
I have another telegram here, which I received last night.Second galvanising pot stopped today through shortage of zinc. Three others closing next week unless supplies are forthcoming. Thirty-two tons of zinc on order. No promise obtainable.This, of course, is very serious, and I trust that some action will be taken, and that it will not be necessary for such a situation to arise again.
1484 There are firms in my constituency and in the City of Birmingham which, for some time, have had difficulties about materials, and I am not sure whether the Ministry of Supply are entirely responsible. I do not understand how some of these very large firms work. It seems to me that some of the smaller firms have great difficulty in obtaining adequate supplies from the larger firms. Whether the Minister of Supply can control that, without taking over all the firms, which would be considered a most revolutionary action, I do not know. If we want freedom for private enterprise, then surely one has to place some responsibility upon the manufacturers.
There is a firm in my constituency—the Speedwell Gear Case Company, Ltd.—which my hon. Friends who represent Coventry may know, and which is supplying a considerable number of gear cases for the Coventry cycle industry and industries in Birmingham. They find themselves in very serious difficulty at times. In fact we hear a lot about Coventry, but Coventry cannot exist without help from Birmingham, and this firm informed me that supplies of tinplate, for example, are very difficult to get. I put the matter to the Minister the other day by letter, and he took action to see whether he could put this firm in touch with a larger firm. Eventually, after the firm had been in anxiety for a considerable time, some action was taken, and the amount of tinplate supply was actually doubled.
I think that if a large firm can suddenly double its supply of tinplate, there is some room for thought and for consideration of whether better arrangements could not be made. With regard to this firm, I went into the office of the general manager and I was shown a number of orders from Malaya, India and Pakistan which, I was told, could not be met. The work which was being done there was very important to the dollar market. I think it is necessary that considerable thought should be given to these difficulties.
Another point which has been put to me is that there is developing a black market in this country for some of these materials. I should like my hon. Friend to look into this also. May I ask him one other question? A firm wrote to me and said: 1485We hear that nickel anodes are being exported to America, who already control large nickel resources, and therefore it seems remarkable to us that this Government should export material to America which is in short supply and at the same time place their own workpeople in danger of unemployment.I hope that my hon. Friend will confirm whether that is so. I ask him to bear in mind the fact that there will have to be strict controls if our economy is to be safeguarded. I have letters from firms in Birmingham asking for controls. I should never have thought that there would be requests from firms for the reintroduction of controls. One firm states:We have an ammunition contract at the moment which has been lying here about six weeks, but all our steel people will promise is that they will try to deliver the necessary steel strip sometime in May or June next. If by bringing back controls industry will get deliveries of steel within a reasonable time for the jobs for which it is most urgently required, then I say, for the Lord's sake, much as we hate controls, let us have them back.That is a remarkable development, Another firm states:For the last six months we have been experiencing difficulties in obtaining adequate supplies of material, particularly board, and although these facts been brought to the notice of the Board of Trade, they have been unable to assist us in any way owing to the absence of controls.Therefore, I say that we must have controls. We have not had a comparable situation in Birmingham during the last five years, during which time, unprecedented in its history, Birmingham has had full employment. It is a surprise to me that employers, the Chamber of Commerce, the Federation of British Industries and manufacturers have not thought it necessary to meet their Members of Parliament to bring to their attention these vital matters which are only now coming out.
§ Sir Peter Bennett (Birmingham, Edgbaston)
Surely the hon. Member appreciates that the organisations to which he is referring have been attempting to get in touch with the Government Departments and that, rightly or wrongly, they thought that that was a more direct approach than going to Members of Parliament and asking them to approach the Minister of Supply? I can assure him that they have not allowed any grass to grow under their feet. As the Minister will confirm, all these facts have been brought to his attention by these organisations.
§ Mr. Yates
I should have thought that the Chamber of Commerce in Birmingham would have been the first people to know the difficulties that are being experienced in Birmingham, and that they would have taken the matter up, rather than that individual firms should have to approach their Members of Parliament. Members who represent Birmingham on this side of the House are meeting the Birmingham manufacturers in conjunction, I hope, with the Ministry of Supply. I am raising this question on behalf of the constituency I represent, which is a hive of industry in the centre of Birmingham. We want to maintain full employment, and I hope that the Government, by reintroducing controls will be able to help Birmingham to maintain full employment and to produce for the export market in ever-increasing quantities.
§ 11.55 a.m.
§ Mr. Martin Lindsay (Solihull)
I am glad that the hon. Member for Ladywood (Mr. Yates) and I have succeeded in catching your eye, Mr. Speaker, because industry in Birmingham, and in the Midlands generally, is facing its gravest production crisis since 1940, owing to shortages of raw materials, particularly of metals. I believe that the next two or three months will be critical, because many manufacturers are now producing from accumulated stocks which may be exhausted in the New Year. What is now at stake is nothing less than the country's essential supplies, production for rearmament and export, the maintenance of essential services and, as the hon. Member has pointed out, maintenance of full employment.
Zinc and zinc base alloys, copper, nonferrous metals generally, brass, aluminium and aluminium alloys, nickel and steel are all scarce and are getting scarcer. We also seem rapidly to be reaching the position that, if we had all the metals we require, we should not have the coke necessary to melt them. When we consider the optimistic statements made about coal production, at any rate until quite recently, we can only conclude that industry has been scandalously let down by 1487 the Government. The situation today is extremely grave for engineering trades, brass founders, electro-platers, the cycle industry and a whole host of other trades.
I cannot accept the view of the hon. Member for Ladywood that we should not seek to put the blame on the Government for this situation, if only in order to seek more effective action in the future. I regard the Minister of Supply as one of the more enlightened of His Majesty's present Ministers. I have found him most accessible. He has a quick brain and usually an open mind. I have found it a pleasure to have negotiations with him. Therefore, I am all the more sorry that I cannot acquit him of grave responsibility for the present situation.
I would remind the Parliamentary Secretary that it is now more than 15 months since the Non-Ferrous Metal Federation warned the Ministry of Supply that the country's stocks of zinc were dangerously low, to which the Ministry replied that they did not think so, and that in any case they thought prices would fall and they were holding their hand in order to take advantage of that situation. This view was not shared by the trade, and, as things have worked out, the trade has been proved right. Whatever we think about bulk buying, we are surely in agreement that it is its function to ensure the maintenance of supplies and not, as the Non-Ferrous Metal Control of the Ministry of Supply apparently thinks, to play the market. If the purpose is to play the market, surely it would be much better done at the Metal Exchanges, where people who are clever at this sort of thing can handle these matters better than people with less knowledge in the Ministry.
The consequence of this mishandling, coupled with American stockpiling, is that the country is short of supplies of zinc. My hon. Friend the Member for Aylesbury (Mr. Summers), in what I thought was a very striking speech, mentioned the astonishing complacency of the Prime Minister who, in his statement last September, said that there was nothing to worry about in regard to the supplies of our raw materials. We all know that the Prime Minister got his information from the Minister of Supply. Not only that, but the Minister of Supply himself stated, on 25th August, that there 1488 were ample stocks of copper, lead and zinc.
It is all very well to blame American stockpiling—and I agree that it has been on a very heavy scale—but this country could perfectly well have obtained a large share of the world's supplies had less complacency been shown, and had a more imaginative and vigorous policy of purchasing been adopted, such as private enterprise would have used. Industry would not then have been in so grave a plight as it is today. We have to consider what the situation is at the moment. It is perfectly clear, from the Minister's statements and from correspondence I have had with the Parliamentary Secretary, that there is no immediate prospect of supplies improving.
In those circumstances, we shall, of course, have to accept some form of rationing system. I can only trust that the Government will permit whatever controls have to be imposed to be operated by the various trade associations in conjunction with the Ministry of Supply, rather than that they should be operated by men in the Ministry with less knowledge. I am particularly concerned with the position of the medium and small manufacturers, because when there are shortages and difficulties, it is much harder for the small manufacturer to get fair treatment, and I am sure that the trade associations are more likely to see that they get their fair share.
In conclusion. I would say that the Government have the main responsibility for ensuring that we get a greater share of world supplies. The Government must also keep industry very much better informed than they have done up to now about the true position, so that industry can plan its production ahead. In particular, the Government's plans for the gearing of industry for rearmament are most anxiously awaited by industry all over the country.
§ 12.2 p.m.
§ Mr. Grimond (Orkney and Shetland)
Among the many phrases which have been doing double. or even triple, duty lately there is one very well known in modern politics—"over-all planning." I think that it is very often used rather vaguely, but if there was an occasion for over-all planning, this is surely it. The answer to the hon. Member for Lady- 1489 wood (Mr. Yates) is that what are now required are not so much detailed controls, but an over-all international plan for the production and allocation of vital raw materials.
Now, this situation arises from the present state of the world. Yesterday we had a debate on that situation. Some of us, myself included, do not feel that we should consider ourselves in a state of war with Russia. Many of us do not feel that rearmament alone will guarantee peace. But whatever our views on foreign affairs, we must realise, as a Member of the United Nations, that at the moment we are at war in Korea and in China, and the whole situation we are debating today flows from the fact of war or the threat of war. Those of us who may disagree on foreign policy can be agreed on the very great urgency of ensuring for this country adequate materials for rearmament, and ensuring that those materials are guaranteed to us before they become available to potential aggressors. I say this without in the least abandoning the position that we should make every possible effort to maintain peace.
My own feeling is that the most vital materials we are concerned with today are comparatively small in number—those that contribute directly to rearmament. I think they are generally considered to be certain materials used for the hardening of steel, rubber, oil and, nowadays, atomic substances. It is on those materials especially, that I intend to address a few remarks to the House. In doing so, I am by no means under-estimating the seriousness of the effects of those matters to which the hon. Member for Ladywood, the hon. Member for Solihull (Mr. M. Lindsay) and the hon. Member for Aylesbury (Mr. Summers) have drawn attention, but it is these particular metals and other substances, to which I want to draw attention.
With our Commonwealth and the United States of America we control a very large proportion of these supplies, and in the past we have had considerable experience in dealing with these metals and these substances in a war situation. I hope we shall not repeat the mistakes, but will have learned the lessons of the situation which existed before the last war. It is common knowledge, I think, that at that time we went on supplying Germany 1490 with certain metals which were vital to her rearmament far beyond the time when it was obvious that it was dangerous to do so.
We must follow up what the Prime Minister said yesterday and ask what machinery is now being established to ensure that those countries which are or are likely to be aggressors, are rationed in their supplies of these materials. It was possible to ration their materials during the war, and the system could have been put into operation before the war. I think that we have a perfect right to introduce machinery which will guarantee that we, with our Allies and the other Members of the, United Nations who are co-operating with us, have the first call upon these materials. A rationing system should be introduced to guarantee only reasonable civilian needs to those nations which may break the peace, so that they can neither stockpile in these materials nor acquire sufficient quantities of them to pass on to actual aggressors.
Furthermore, we must have machinery which plans and controls—and I agree that the controls may have to be severe—the production of these substances, in the interests of ourselves and those who co-operate with us. If it is confined to a comparatively short list of materials, it should not be very difficult to make at any rate a start in setting up this machinery to guarantee us our supplies and to deny them to the aggressors. It has been reported that America has "black-listed" a British firm. If that is the case, it discloses an exceedingly serious position, and it is not one which we can accept. We must have international agreement on this subject. We cannot have one nation picking out a firm of another nation and saying it is to be denied access to the market.
There are many other materials which are actually in short supply, or are very likely to be in short supply, or whose price has reached such a height that the supply of them to many users is limited; and I think it is unfair to expect the Government to deal with the whole situation, at least with any rapidity. It is obviously a very difficult and a long-term matter. All I can say is that I think that there should be some joint international agreement on buying. I dare say also that the Government can help, as has 1491 been suggested earlier in the debate, by allocating them within this country. But my main point is that for the few materials that are vital, we should at once set about introducing some machinery, of which we have had experience in the past, and which to my mind would prove invaluable.
§ 12.9 p.m.
§ Mr. Chetwynd (Stockton-on-Tees)
I am glad that the hon. Member for Orkney and Shetland (Mr. Grimond) has tried to put this debate into a better perspective by relating it to the world situation and to the existing threat of war. I rather feel that the two Opposition speakers, in their anxiety to attack the Government for their share, tended to belittle the importance of the present international situation in its effect upon the scarcity of these vital materials.
I think that at this time we ought to be concerned mainly with the equitable distribution of these commodities in two ways: first, between countries themselves; and secondly, between individual buyers and users in those countries. That would seem to make certain at this stage that there should be some effective international control of both buying and allocation, and some effective internal control of distribution, in order that our economic stability can be preserved, and so that we shall not have to face any large scale unemployment. If we are trying to create conditions in which all the difficulties of the future will be overcome, we have to do our utmost to prevent unemployment arising here.
There are already very disquieting signs that, although the rearmament policy has scarcely yet influenced production, the world-wide scramble for raw materials, competitive buying and the soaring of commodity prices are causing serious concern to industries at home, and particularly to the engineering industry. It seems evident that stock-piling by private industry and official stock-piling by governments have led in many cases to panic buying of these materials in an unco-ordinated and a competitive way. Government intervention at this stage is essential if we are to maintain our economy and prevent unemployment.
The hon. Member for Aylesbury (Mr. Summers), who opened the debate, rather 1492 thought that we had given unreasonable attention to prices, and that as we were not willing to buy certain commodities at certain prices, we were deprived from getting those metals. If that is so and if we are to put the whole of our buying into private hands and allow them to bid up and pay any price, I am very doubtful if we could have got any more materials, because there is only one country in the world which can carry out that policy, and that is the United States of America. With their unlimited wealth, the Americans could outbid us all along the line, and we should not get any benefit by letting private enterprise bid up as it would want to.
One of the major causes of the difficulties today is American stock-piling. It seems that if they are going to build up their stock-piles for strategic needs, they must not be blind to the significance that this action will have upon their Allies and upon the democratic world as a whole. By their present method of buying these necessary materials, they are automatically interfering with the needs of armament production in this and other countries, and more important than that, because of this policy there might very well come a time when there would be a weakening of morale and of the economic strength of the democracies, which is as important as is military strength at a time like this.
"The Times" of 30th October has this to say about it:If American stock-piling is liable to create difficulty for other countries' industry and already make it impossible for them to build up their own stocks even to reasonable levels, it is time for an international review of Government policies in commodity markets.It seems to me that that process is now bearing fruit. It has taken two months to work its way through, but in O.E.E.C., in Washington, and at home we are going ahead with what we hope will be effective international control of buying and allocating these scarce metals.
I want in particular to deal with the iron and steel position. I represent a Teesside constituency, and it is vital to our livelihood that there should be an efficient production of iron and steel just as it is vital to the whole of our economy. There is great anxiety about the future level of production, and this does not arise from a lack of capacity but through possible 1493 shortages of raw materials. One of the facts of the present high record output of steel, for which we are all very grateful without going into the reasons for it, has been an increased supply of scrap which we have been able to get from Germany and also from the home scrap trade. It seems true that Germany can no longer be relied upon as a possible source of scrap in any great measure, because first of all they are using large quantities themselves in their own steel industry.
There is an increased demand from the United States to buy German scrap, and it is more than likely that our imports from Germany may fall by half. That means that we have to get from half a million to three-quarters of a million tons from other sources next year. I should be grateful if my hon. Friend the Parliamentary Secretary to the Ministry of Supply could give us some indication of the prospect of obtaining that additional scrap from other sources.
We could get it from a more speedy return of scrap back to the steel works, and something from the breaking up of ships. I do not know what prospects there are, but there has been no export of ships for breaking-up purposes and I hope we shall not resume exports. It seems again that we cannot expect to get increased iron ore from Sweden to make up the deficiency from scrap, because they are reluctant to let us have iron ore without coal in return. We must have a large-scale drive at home to maintain our scrap supplies if we are to keep up the large output or iron and steel.
There is no complacency in the industry itself, and I do not think the Government, judging from the statement they made last week, are unaware of the difficulties either, but I should like to issue a warning, because this is bound to be used later on by the Opposition if there should be a falling off in steel production next year through lack of raw materials. If that should happen, I hope they will not try to lay it at the door of nationalisation. I pointed this out two years ago when I spoke on the Third Reading of the Iron and Steel Act. I said that it was most likely that we should have great difficulty in maintaining this level of production, because of coke and scrap supplies. I hope it will be understood that those difficulties, if there should be a falling 1494 off, will be the cause of it, and that hon. Gentlemen opposite will not seek to make political capital out of it.
§ Mr. Summers
The hon. Gentleman, speaks of not laying at the door of, nationalisation the blame for any short fall in steel, but if it is attributable to the lack of coke, would it not be a perfectly valid criticism to blame that on the nationalisation of coal?
§ Mr. Chetwynd
No, I think it would be far more just to say that it would be a reflection of the increasing demand through full employment in this country, which has stretched our coke resources to the full. It is a remarkable thing that today as compared with before the war, we are facing a prospect of unemployment now when materials are scarce, whereas before the war we had unemployment with a plenitude of materials. It is another paradox that today it is going to take the possibility of a war to create unemployment, whereas before the war it was the possibility of war coming along which made unemployment less extensive and brought about a measure of full employment.
The other point I wish to deal with is the position of certain small firms, such as constructional firms and so on. At the moment the steel makers are swamped with orders for all rolled steel products. I believe that the works are fully booked up for nine or 12 months, and I should like, to ask my hon. Friend if there is any indication that this rush to buy is showing any signs of falling off at the present time.
It is quite clear that the small firms do not deal direct with the works but through the stock holders, and they cannot plan ahead for nine to 12 months because of the tremendous fluctuation in their demand and supplies. Although they get help from Government Departments and from the Regional Board for Industry; there is really very little the Government or the Regional Board can do whilst this mad scramble to build up stocks in anticipation of future need is going on.
I ask my hon. Friend two questions. Is he considering whether there can be a reimpositon of the control of steel distribution on those items from which it was removed some time ago? Is that a practical possibility at the present time? Secondly, would he bear in mind the exceptional 1495 needs of firms in development areas whose employment is so vital in those parts? I could deal with sulphur, but that was dealt with at Question time yesterday and is more the concern of the Board of Trade.
Finally, I should like to make these two points. It is essential, if we are to get over this problem, that we should not only deal with ad hoc measures to give emergency relief. That can be done, but it means all the time robbing Peter to pay Paul. We must have an overall strategic concept, and I hope that my hon. Friend will be able to give more information about the joint talks which have been taking place with the United States. Above all, it is essential that we should bring in all the O.E.E.C. countries and the Commonwealth also—we cannot settle this just between ourselves and the United States. I hope that the two problems of buying internationally and of allocations at home once we have obtained the materials, will be dealt with effectively and swiftly by my hon. Friend.
§ 12.21 p.m.
§ Mr. Fort (Clitheroe)
I should like to follow the remarks of the hon. Member for Stockton-on-Tees (Mr. Chetwynd) about international arrangements for overcoming the shortages of raw materials. But in the very short time available on this subject, I shall not do so, because those solutions or assistances in our present difficulties, are of a long-term nature, I shall confine myself to asking for information about what can be done in the short-term future. I shall, however, follow the hon. Member in one matter, in an industry other than iron and steel, to let the House know that in Lancashire there is a real fear of unemployment owing to the shortage of American raw cotton. Before the war, about 40 per cent. of all the raw cotton consumed in Lancashire came from the United States. Today, the percentage is still considerable—well over 20 per cent.
The present shortage is, perhaps, in part due to American stock-piling, although that is certainly not the major factor. The shortage has been caused without any doubt by some very curious planning—or, as I think the Americans prefer to call it, programming—by the United States Department of Agriculture, who in the last growing season persuaded 1496 the farmers to reduce the cotton area in the cotton States by about 60 per cent. because of the heavy carry-over of raw cotton from the previous season. Like other planners, however, they did not forecast the future, including the extraordinary marked rise in American raw cotton consumption, nor did they foretell—they cannot be blamed for this—the Korean war, which has unquestionably added greatly to the difficulties.
In consequence of the small American crop, the United States Government have cut the total export allocations. The President of the Board of Trade gave information about this yesterday and he reminded the House that not only has the total American export allocation been cut, but, what is particularly severe on this country—one might say, almost insulting—is that our share of the total allocation is very much lower than that of our former enemies—Japan, Western Germany and Italy.
In that connection I smiled at the supplementary question asked yesterday by the hon. Member for Nelson and Colne (Mr. S. Silverman), who quite properly drew the attention of his right hon. Friend to this situation. Of course, the party opposite have committed themselves to trying to help these poorer countries, even at the expense of our own, but when there is an early opportunity of putting that policy into action, I am glad to say that they speak here as Englishmen, and not in their general woolly international way.
The hope for additional allocations to this country is based on the fact that 600,000 bales are still unallocated. I ask the hon. Gentleman who is to reply, as I asked the President of the Board of Trade yesterday, whether he can give any information at all about what indications there are from the American Government of the extra number of bales which we can get from this unallocated quantity.
I hope we shall not hear too much in the reply about the way that the Raw Cotton Commission are supplying Lancashire with substitute growths in place of the American raw cotton. All substitutes are unsatisfactory, some rather less unsatisfactory than others, but unfortunately the crops of the two more satisfactory substitutes—the Nigerian and Uganda 1497 growths—are limited and will not make up the difference in the short-fall, and neither will that of Brazil, which also has had a crop failure this past season.
The most acceptable of all the substitutes perhaps, are the synthetic fibres, particularly of rayons—viscose and acetate rayon—but here the Government have been indulging in some very curious actions. They have allowed exports of rayon staple to the Continent, for which we were getting 18d. per. lb. They allowed imports of Norwegian staple, for which we paid 22d. per lb., plus 9d. per lb. Excise Duty, or a total of 31d. per lb. This seems a queer way of doing business. More recently, the Norwegians have found themselves sold out owing to the hesitations which the Government have caused in allowing people to place contracts for further Norwegian supplies, and at the same time the price of our own exports has risen only to 23d. per lb. The Government should stop this folly of allowing substantial exports of rayon staple and of allowing back into this country, if they are procurable, imports at a much higher price, of staple of similar or identical quality, and certainly a quality which could be used as a reasonable substitute, at least in part, for the raw cotton which we cannot get from America.
I should like the Government to remove some of the fears in Lancashire about unemployment resulting from this shortage of American raw cotton, by giving more information about stocks. All that we have is the total stock in Lancashire of all growths. I ask the hon. Gentleman when he replies to give some sort of breakdown of those stocks, and of the American raw cotton in them, into suitable ranges—for example, by staple lengths. If the hon. Gentleman would give also, in order of priority—the largest first and the smaller ones lower down in the list—the stocks of the main growths other than American, he might go a long way towards removing some of the fears of unemployment. If he does not do so, he will confirm the suspicion of all of us connected with the Lancashire textile industry that the Government are deliberately trying to disguise the stock situation to conceal the incompetence of the centralised organisation which they themselves have set up—the Raw Cotton Commission.
1498 I turn to one other critical raw material question, and I must declare at least a past interest in this matter because for many years I was employed by a company which is one of the larger sulphur consumers in this country. The shortage here is of the most desirable form of sulphur, and has certainly not been caused by American stockpiling. Indeed, last year the Americans actually reduced their stocks in order to meet their domestic and export commitments. The alternative sources of sulphur for producing sulphuric acid require the use of more complicated plant at sulphuric acid works and consequently, considerable capital expenditure, and would certainly take up to two years to install.
We have an immediate short-term problem of getting more sulphur from the United States. I ask the hon. Gentleman whether he can clear up one confusion which exists in the trade; that is, whether this country is going to receive the minimum quantity under the contract between the British manufacturers of sulphuric acid and the United States Sulphur Export Association, which I understand is just over 200,000 tons, or whether we are to receive a larger tonnage, which has been mentioned from time to time—I think my hon. Friend the Member for Devizes (Mr. Hollis) mentioned it yesterday—of 400,000 tons.
I also ask whether the Government would be prepared, when the next Budget comes along, to consider making special allowance for the very heavy capital expenditure which undoubtedly will be required if we are to install plant needed to use larger quantities of the alternative sources of sulphur for making sulphuric acid. I will not enlarge on the background of my proposal. The trouble is the small amount of profit left with the companies after taxation, but from which the capital needed for new construction ought to be drawn. I also ask the hon. Gentleman whether he can give the industry some idea of what usages of sulphuric acid are likely to be rationed in addition to the super-phosphate production, which I understand has already been reduced by 20 per cent.
§ 12.33 p.m.
§ Mr. Jenkins (Birmingham, Stechford)
No one will dispute for a moment the extraordinary seriousness of this problem at the present time, but I think there is 1499 some dispute about the reasons for it arising at this time. The hon. Member for Aylesbury (Mr. Summers) suggested that everyone except the Government knew of this grave problem long ago, but I do not think that is so at all. If one looks back to the "Metal Bulletin," a trade periodical, one finds an extraordinarily complacent article as recently as 6th October. In the "Financial Times," a newspaper which has been giving us a great deal of information on the subject in recent weeks, before about 25th November there was practically no mention of it at all, and not until the end of the month, the 29th or 30th of November, did it begin to give a great deal of attention to the matter.
§ Mr. Charles Ian Orr-Ewing (Hendon, North) rose—
§ Mr. Jenkins
I have very little time and cannot give way.
The second point dealt with partly by the hon. Member for Aylesbury and partly also by the hon. Member for Solihull (Mr. M. Lindsay) was that bulk buying had a good deal to do with the shortage. I have not seen that suggestion supported either outside or inside the House by any evidence. It has just been a question of asseveration. There is a great range of reasons—difficulties of obtaining supplies, U.S. increased consumption, U.S. stockpiling, U.S. restriction on export licences—which have had a great deal more to do with the matter than any question of bulk buying.
Certainly there was no question of that in regard to cotton, and the hon. Member for Clitheroe (Mr. Fort) provided a complete answer to, his hon. Friend the Member for Solihull by explaining exactly what has happened in regard to cotton and making it abundantly clear to the House that our method of purchasing it had nothing to do with the present shortage.
§ Mr. Jenkins
That was certainly not the impression one got from the speech of the hon. Member in which he ascribed the reasons, in considerable detail, to changes which had taken place in America. It seems to me that at the present time when everyone knows that this problem can only be solved, in so far as it can be solved, by Government to Government action, to suggest that the solution is in any way to be found by setting the private trader free is quite ludicrous. We had the spectacle of the 18 nations at O.E.E.C. trying to deal with the problem. How did they deal with it? They sent a delegation to Washington to see the United States Government. They did not send their own private buyers.
I agree with my hon. Friend the Member for Attercliffe (Mr. J. Hynd) who said the other day that if private traders can solve this problem, let them try. Let them try without the help of the talks between the Prime Minister and the President which have been going on in recent weeks. Clearly, the only solution to the problem must be provided by Government to Government arrangements. I am very glad that the communiqué issued after the Washington talks does offer some hope here. I am particularly glad that it laid stress not only on the importance of getting adequate supplies of these metals for military consumption, but also on maintaining healthy civilian economies. I am also glad that one of the immediate practical results has been the diverting of a ship-load of sulphur to this country from another destination.
I have a vital constituency interest in this problem; not greater than that of many other hon. Members but, I think, as great as that of any hon. Member. But I do not think it is any good approaching it largely from a constituency point of view, or from the point of view which my hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd) described as robbing Peter to pay Paul. This is a national problem and we must appreciate the difficulties of the Ministry of Supply. It is no good going to the Ministry of Supply and saying, "A works in my constituency is going to lay off 100 men tomorrow, what are you going to do about it?," as if the Ministry had great stocks of zinc or aluminium on which they could lay their hands. At the same time of course, we want to know that they are 1501 doing everything possible to get additional supplies. In this connection I ask my hon. Friend to say whether it might be possible to do a little more to get extra aluminium from Canada. Aluminium is short in its own right and there is to be a cut of 12 per cent. It can also be used in certain circumstances as a substitute for zinc.
The effect of the present situation on our economy as a whole is extremely serious. With the worsening of the terms of trade and with extra armament expenditure, we can if we get an increase in industrial production of about 6½ per cent. next year, as we have had this year, that is to say, a 4 per cent. increase in the national income, get through our difficulties without a great reduction of the standard of living. I would calculate the reduction at, perhaps, 1½ per cent., which is bad enough, but is not enormous. But what would be the position if, on the other hand, instead of an increase of 6½ per cent. on industrial production, there were a diminution of 6½ per cent. which would not be impossible if supplies get worse, because the contribution which the non-ferrous metal using trades have made to our increased production has been very great.
If that happened, the effect of trying to carry out this rearmament, bearing in mind also the effect of the worsening of the terms of trade on our economy, might be a loss not of 1½ per cent. but of 10 to 12 per cent. in the national income. We must make this clear to the Americans, who, as Marshall Aid has shown, have been so understanding of the need to build up our economy. If they allow this raw material shortage to go on, it may undo a great deal of the good which Marshall Aid has done in the last few years.
§ 12.41 p.m.
§ Squadron Leader A. E. Cooper (Ilford, South)
I am grateful for the opportunity of making a few observations on behalf of an industry which I represent. I must declare an interest in connection with the remarks I shall make, which will be related entirely to the chemical industry. It suffers at the moment in three ways, very largely as a result, directly or indirectly, of Government action or inaction. First, there is this overriding problem of shortages. Like my hon. 1502 Friend the Member for Aylesbury (Mr. Summers), I do not intend to weary the House with many extraordinarily long names. I will mention only two. The first is toluene, which is produced from gas, and in the area which is now the Midlands section of the National Coal Board large supplies were made available to the chemical industry before nationalisation. I understand that since nationalisation the Midlands section of the National Coal Board have no longer been producing it, and the lack of supplies or the shortages of supplies from that source is causing considerable hardship at the present time.
The next product with which I wish to deal has a long name—phthalic anhydride. It is used in a very large number of products which are used directly in one form or another in Government contracts. The Government must make up their mind, so far as phthalic anhydride is concerned, what priorities they are to give. There are five different fields in which this product is used. The Government must tell the manufacturers in this country the priorities that must be observed.
Then there is the question of the German contribution of chemicals to this country. Traditionally, they have always supplied great quantities. I understand that now, in consequence of British and American Government policy, the German chemical industry is restricted to a certain tonnage. They are producing and shipping 300 tons a month of one product, styrene. The industry in Germany is capable of a production of more than twice that volume, but it is restricted by coal supplies, which is holding up production.
The Government also place large contracts on their own behalf with various paint, varnish and cellulose lacquer manufacturers. I earnestly ask them to consider breaking down those contracts into much smaller denominations. The placing, in some cases, of these large contracts with relatively small firms may result in those contracts ultimately not being fulfilled. I ask the Parliamentary Secretary if at some future date he will consider, with his right hon. Friend, meeting a deputation from the paint, varnish and cellulose lacquer manufacturers in order that they may discuss at the highest possible level the serious problem with which they are confronted.
§ 12.44 p.m.
§ The Parliamentary Secretary to the Ministry of Supply (Mr. John Freeman)
At the end of a short but discursive and very interesting debate, it is rather a problem, in the short time available to me, to reply. I should like, first, to make two or three general remarks about this situation and then deal, in what I am afraid must necessarily be a disjointed manner, with points about particular raw materials which have been raised during the debate.
Some hon. Members, particularly the hon. Member for Aylesbury (Mr. Summers), who opened this debate, have made great play with what the hon. Gentleman called the complacency and the failure to take effective action on the part of the Government. I do not think there is time now to argue this case as we should perhaps do in a full day's debate, but I must say with all emphasis that I repudiate both those charges. We have not shown complacency about this problem. To the best of my knowledge, we have done everything which it has been possible to do to secure an adequate supply of materials which industry will need in the course of next year.
The hon. Member quoted a remark made by the Prime Minister in an earlier debate to the effect that he had no serious anxiety or worry about raw materials. The hon. Member has taken that remark out of its context. The Prime Minister at that stage was not concerned with going into the marginal shortages which were likely to arise. What he was saying was that, within the context of carrying out a rearmament programme costing £3,600,000 over three years, the Government saw no reason why a shortage of raw materials should interfere with its being carried out.
§ Mr. Lyttelton
Is the hon. Gentleman really suggesting that sulphur is a marginal shortage in industry?
§ Mr. Freeman
No. If the right hon. Gentleman will bide his time, he will see that I was suggesting nothing of the sort. I was suggesting that the whole point of the Prime Minister's remark was that at that time we saw no reason why the defence programme should not be carried out because of raw material shortages. I do not deny that since my right hon. 1504 Friend made that remark the situation has changed somewhat for the worse; but on the whole—I speak to the House with great frankness and without partisan bias on this matter—I would say that at this stage we are still prepared to say that we see no reason why the defence programme should not be carried out, though it is clear that we have to take emergency action in the case of some of the materials which are bothering us.
As to what could have been done between the time when a possible shortage first manifested itself and the present, no hon. Member has in this debate or, so far as I know, at any other time, suggested any course of action which we could have followed that would have given us a more reasonable chance of obtaining more supplies of these materials than the actions which we have carried out without their suggestions.
There is one exception only to that, which is sometimes raised in general discussions on bulk purchase. That is the difficulty in which we have been, and in which we still are, in regard to our balance of payments with the dollar countries. There have, of course, been occasions in recent years and months when we have been unable to buy supplies of one material or another which might otherwise have been available because we have not been able to pay dollars for them. But that difficulty would have arisen whether purchasing was done centrally or on private account. I do not think that at this stage there is much point, nor is it relevant, to take up any argument which may exist one way or the other as to the desirability of central purchasing or purchasing on private account.
What we have to do to meet the situation is first to take all the steps in our power to increase the production of scarce materials; then we must scrape the barrel wherever raw materials are sold in order to find any extra supplies which can be picked up. Perhaps most important of all—the hon. Member for Orkney and Shetland (Mr. Grimond) put it extremely well—we must try to look at this problem on the context of the international situation and see whether we can face it as an international problem.
The Prime Minister, in his speech yesterday, referred to the economic section of the talks he had with President 1505 Truman in Washington. I am not at liberty now to go further than the form of words which my right hon. Friend then used, but he made plain to the House yesterday that we and the Americans had agreed together that the continued adequate supply of raw materials was a joint problem which was of equal importance to both of us. and that we were considering it together with a view to taking action together about it. Announcements will no doubt be made from time to time both about the machinery which will be used to deal with that problem and the progress which is made. I am not in a position this morning to say more.
I wish to say a word about one other point which has been mentioned in the debate, and which is of some importance, particularly in the case of steel. My hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd) spoke of the difficulty which the small firm was at present experiencing in getting its supplies. He asked me questions about the volume of scrap imports which we might expect next year, and consequently the volume of steel production. We must at this stage make forecasts with due caution. We do not know what volume of scrap imports we shall be able to get next year. We do not know for certain what volume of iron ore imports we shall be able to get next year. But, with due caution, and going somewhere in the middle between the most unfavourable and the most favourable assumptions, it is reasonable to advise the House that we shall not have enough raw materials next year for the volume of steel production to continue increasing as it has done in the last three years. On the other hand, we ought to be able to maintain approximately—
§ Mr. Freeman
The right hon. Gentleman said that that would be the alibi for nationalisation. He knows perfectly well, as does everybody who has any dealings with the steel industry, that the shortage of raw materials for steel-making is a serious problem which the whole industry is considering with great anxiety. Argument about the rights or wrongs of nationalisation does not help us over this problem. As far as we can see now, probably the output of general steel next 1506 year will be somewhere about the same level as it is this year; that is to say, somewhere about 16,250.000 tons. If that is so, it is pretty clear that there will be enough steel, allowing possibly for a slight cropping back of exports if necessary, to meet our essential demands.
As far as any of us can calculate, there is now enough steel to meet our demands. Therefore, the apparent shortage which has developed during recent weeks is a shortage which arises from panic ordering. I most earnestly ask those people who are placing orders for steel, and who have placed orders in recent weeks, first, not to duplicate their orders. That is part of the trouble. Secondly, I appeal to industry now to look round and, where duplicate orders have been placed, to take the bold course and cancel them. If that were done, it would have a striking effect in a very short time on the general steel situation in this country.
I was asked questions about sulphur by the hon. Member for Aylesbury and others, including the hon. Member for Clitheroe (Mr. Fort). I cannot answer all the questions that were asked because at this moment the Government are not in possession of the necessary information. The fact is that the United States have taken over the allocation of American sulphur supplies both for home and for export, and they have not yet told other countries what allocations they are likely to get.
I want to clear up a point, which was raised yesterday at Question time, about the emergency shipments which have been reported recently in the Press. The facts are these: an instalment of 20,000 tons for the manufacture of sulphuric acid has been promised for shipment to this country during January, 1951—that is, next month. Arrangements have also been made for an emergency consignment of 7,500 tons, for manufacturing purposes other than sulphuric acid, to be shipped during the present month. Although they quoted the figure wrongly, I think that the reports that have appeared in the Press may have referred to that second shipment. That is the position about the reports of the emergency shipments.
On the admittedly far more important problem of what the prospects are continuing into next year, we have not yet at our disposal the facts which would 1507 enable me to tell the House accurately—
§ Mr. Lyttelton
The hon. Gentleman is, I think, in a position to say that our shortage of elemental sulphur during 1951 will be of the order of 250,000 tons and that, therefore, the emergency shipments should be considered in relation to that amount.
§ Mr. Freeman
I certainly am in a position to agree with the right hon. Gentleman that our shortage is very serious.
§ Mr. Summers
Would the hon. Gentleman see that, in discussing subjects like this, we present our case as partners in a world enterprise and not merely as customers of producers in America?
§ Mr. Freeman
That was partly the Prime Minister's intention in going to Washington.
I should like to say a few words about zinc which, as far as metals are concerned, presents far the most serious of the shortages. The hon. Member for Aylesbury said that we had had many warnings from the Opposition. If the world were to end in cosmic chaos tomorrow morning, no doubt the Opposition would be able to claim that they warned us about it. The credit to His Majesty's Government is that they ever take notice of warnings from the Opposition—not that they sometimes do not.
The fact is that, as the hon. Member for Stechford (Mr. Jenkins) pointed out, the metal trade has not entirely taken the same view as the hon. Member for Aylesbury on this point. Zinc has never been one of the metals which has been relatively plentiful. It has always caused us some concern since the war. The acute shortage which we are facing now has arisen since the beginning of the last quarter of this year. It was at the very beginning of this quarter that we first warned industry and first made a restriction on consumption by industry.
The main cause of the shortage in all these metals is the fact that world demand has very suddenly and sharply risen. But the particular cause in the case of zinc, which has upset our calculations to a much greater extent than it would have been reasonable to suppose, was the failure of a large consignment of zinc from 1508 Belgium which we had a clear undertaking would be delivered in this quarter. It has not been delivered and probably may not be delivered in the next quarter. We are at present engaged in seeking any parcels of zinc that we can find anywhere in the world. Neither prices nor dollars will be a consideration which will prevent us from picking them up if they are available. I do not think that on that subject we can do more.
The zinc problem is indeed a very serious one. Of all these metal shortages, this is the one most likely to have serious repercussions on industry in the next few months. I repeat what the Prime Minister said yesterday—that zinc was one of the materials discussed in Washington. I am not in a position to say whether anything will come out of those discussions or not. But it is clear that we have to face the prospect, at least for the first two quarters of next year, of a very serious shortage.
Therefore, I must announce to the House that the Ministry of Supply will, as from 1st January—the beginning of the next quarter—introduce an allocation system for zinc. As any hon. Members who have had dealings in this field will realise, it is a matter of great complexity. I must admit that probably the allocation system introduced on 1st January will not be as extensive or as effective as we shall be able to secure in the course of subsequent months. But we are introducing an allocation system on 1st January, and I think that that meets part of the point put by the hon. Member for Ladywood (Mr. Yates).
§ Mr. Drayson (Skipton)
The hon. Gentleman has said that if parcels of zinc can be picked up in any part of the world, prices or hard currency will not be a consideration which will prevent the Government from buying them. Do we understand from that statement that there is a possibility of an increase in the price of zinc, which is at present controlled?
§ Mr. Freeman
No. We are talking about very small parcels of zinc, because there are no very big supplies available anywhere. Incidentally, perhaps I ought not to say that in no circumstances would price be any consideration. There are degrees of extortion to which we should not submit, but, broadly speaking, price will not be what holds us back.
1509 The hon. Member for Stechford asked a question about aluminium. Our main supplier of aluminium is the Aluminium Company of Canada. During this summer we realised that the rearmament programme was likely to put a heavy drain on our aluminium supplies. Immediately, in the normal way, we started negotiations with them to see whether we could conclude fresh contracts to increase our supplies. Of course, aluminium is one of the most essential commodities for rearmament. I am glad to be able to tell the House that, since the Minister of Supply spoke on 7th December, negotiations with the Aluminium Company of Canada have been successfully concluded. A full statement will be issued by the Ministry of Supply in a day or two, but in the meantime I can tell the House that we have secured a sufficient supply to meet our defence and essential civilian requirements for 1951. Of course, the exact situation will depend on how the Government decide to allocate these supplies, and I am not going to say there will be no shortage in non-essential uses, but our needs for defence and essential civilian uses will be secured.
There is one question of detail which I want to answer. I would not like it to go out without correction that, as was suggested by my hon. Friend the Member for Ladywood, we were exporting nickel anodes to the United States. There is no truth in that at all. We are not exporting any nickel to the United States.
On the subject of cotton, the hon. Member for Clitheroe put to me a number of seductive questions which he had tried on my right hon. Friend the President of the Board of Trade yesterday. My right hon. Friend then said that in the present situation he was not prepared to commit himself further. Nor am I today. I think the House will be grateful to the hon. Member for the frank and extremely fair way in which he stated his case, but I must abide by the judgment of the President of the Board of Trade and make no further comment.
Regarding the anxiety in Lancashire, I think the greatest disservice is done to the people of Lancashire by making remarks like that at the end of the hon. Member's speech. Of course, one does not seek to conceal these things, but the fact is, as the President of the Board of Trade 1510 made plain yesterday, that we are engaged in negotiations at this moment, and that it would not be wise to say more than we have said so far. There is no ground, at the moment, for justifying exaggerated fears; on the other hand, as the hon. Gentleman knows quite well, the position is critical, and I think that he and I would be well advised to leave it at that for the moment.
Finally, in reply to the hon. and gallant Member for Ilford, South (Squadron Leader Cooper), on the subject of toluene, I must have notice of that question as I am not in possession of the necessary information. Concerning phthalic anhydride, I am advised that at the present moment the Board of Trade would not consider it necessary to establish any formal control, but, of course, attention is being given to the question of establishing priorities. While I do not think I can commit my right hon. Friend to receive a deputation without just formally consulting him, I have no doubt that he will consider the suggestion favourably, or that the appropriate Minister will do so.
I think I have already gone just over my time, for which I apologise to the House, but it has been extremely difficult to deal with this debate in the time available to me. I am conscious that there are still a number of points which have not been adequately dealt with, and I could have wished to have a longer opportunity. Let me say, in conclusion, that the Chancellor of the Exchequer, speaking during the defence debate in the special Sitting of Parliament in the middle of September, made it quite plain that the Government was prepared, and the country had got to be prepared, to face the difficulty of industrial or economic dislocation which necessarily arose from carrying out this defence programme. As my right hon. Friend put it, our defence requirements and dollar exports rank equal first.
There is no doubt that we are going to have these difficulties in the coming year, but we believe that our defence programme can be met; and the Government will not neglect anything—whether by imposition of controls, resorting to unconventional methods of buying or entering into discussions with other countries to establish international allocations—that needs to be done for the carrying out of this defence programme, if it is humanly and physically possible.
§ Mr. Deputy-Speaker
Order. The right hon. Gentleman looks a little surprised. He will forgive my saying so, but I cannot call him, because, as he knows, the time has been fixed by Mr. Speaker, it has been published and has been accepted by the House, and has already been over-run. With the greatest good will, even in the festive season, and as I informed him, I cannot allow the right hon. Gentleman to impinge on the rights of another hon. Member. I therefore hope that he will not press the matter.
§ Mr. J. Freeman
With very great respect, Mr. Deputy-Speaker, may I intercede with you? I was called to reply a minute or two later than had been arranged, and I have not run over that margin, which was already there. The right hon. Gentleman did rise with the formula "Before the hon. Gentleman sits down," and may I therefore ask you—
§ Mr. Deputy-Speaker
I do not think one ought to depart from the normal rule; otherwise all along the line, in every Adjournment Debate, the rights of other hon. Members will be impinged upon. I am sorry.
§ Mr. Geoffrey Lloyd (Birmingham, King's Norton)
On a point of order. May I ask you, Mr. Deputy-Speaker, whether it is not the well-established practice of the House that, if a Minister is prepared to reply, hon. and right hon. Gentlemen on this side of the House are permitted to ask a question, which is technically within the limits of the hon. Gentleman's speech?
§ Mr. Deputy-Speaker
The right hon. Gentleman will forgive me, but that is not quite the position. The right hon. Gentleman himself, only about five minutes ago, indicated to me that his right hon. Friend the Member for Aldershot (Mr. Lyttelton) wished to address the House for two or three minutes. That is not the kind of interpolation which is usually permitted under any formula, and, in the circumstances, as I have Mr. Speaker's instructions to adhere to the strict times, I think I must call upon the hon. Lady the 1512 Member for Coventry, South (Miss Burton).
§ Mr. Lyttelton
On a point of order. It was not to address the House, but to ask the Minister at the Box a question, that I rose, and, with great respect, I suggest that it is carrying regimentation a little far if we cannot, in the time allocated to the Minister's speech, ask a question on the formula "Before the hon. Gentleman sits down."
§ Mr. Deputy-Speaker
As I have indicated, the right hon. Gentleman the Member for King's Norton (Mr. Geoffrey Lloyd) informed me that his right hon. Friend the Member for Aldershot desired to speak for two or three minutes, and that is a different proposition altogether from merely asking a question, which the right hon. Gentleman could do on other occasions, and, indeed, could have done while the Minister was speaking. I am sorry, but the time-table must be adhered to.
§ Mr. Lyttelton
If there is any misunderstanding, I should be glad to see it cleared up. I understood that I would not be called upon to address the House for two or three minutes, but I wished to ask one question.