§ 7.38 p.m.
§ Colonel Cyril Banks (Pudsey)
I beg to move,That an humble Address be presented to His Majesty, praying that the Order, dated 13th June, 1951, entitled the Nickel Prohibited Uses (Minister of Supply) Order, 1951 (S.I., 1951, No. 1048), a copy of which was laid before this House on 14th June, be annulled.
§ Mr. R. S. Hudson (Southport)
On a point of order. It has been suggested that we might discuss this Order together with the next order, namely:That an humble Address be presented to His Majesty, praying that the Order, dated 13th June, 1951, entitled the Nickel Prohibited Uses (Board of Trade) Order, 1951 (S.I., 1951, No. 1049), a copy of which was laid before this House on 14th June, be annulled.The principle of both the Orders is the same. The only difference is that one applies to articles superintended by the Board of Trade and the other to articles superintended by the Ministry of Supply. I think it would be for the convenience of the House and would shorten the debate very materially if we could discuss the two together.
§ Colonel Banks
Hon. Members on both sides of the House will agree that with the re-armament programme, there is a grave shortage of raw materials. Everyone will have the greatest sympathy with the Departments concerned not only with acquiring the necessary raw materials, but with ensuring that the distribution is such that due regard is paid to all the things for which we need to use those raw materials. Our reason for bringing up this subject tonight is not that we wish the Order to be annulled merely because we do not consider it necessary to control the supplies, but rather that we would suggest a different approach to the problem.
I presume that estimates have been made by the Departments concerned, namely the Ministry of Supply and the Board of Trade, regarding the amount 2405 of nickel required over the next difficult period. I understand that this year there will be a shortage and that next year the shortage will be worse than this year. Having presumably made the estimates, I wish to ask a question of the Minister through his Parliamentary Secretary.
In taking into consideration the allocations for use in the future, has due regard been paid to the reduced quantities of nickel which will be consumed as a result of other raw material shortages which will make it necessary for manufacturers to curtail their programmes? For instance, by virtue of the shortage of aluminium sheet, in the delivery of which at present there is a delay of nine months through ordinary channels, some manufacturers will use far less nickel than would otherwise have been the case. Has consideration been given to this reduced intake of nickel by these manufacturers, or have the Government merely taken rearmament requirements and the normal usage of nickel compared with 1950 and said, "We have only this amount of nickel compared with last year"? The requirements will be very different because of the shortage of steel, copper, brass, zinc and other commodities.
Another unusual point is that we appear to have changed over to American practice rather than to have followed the practice which has obtained in the past. I have given the Minister and the Parliamentary Secretary notice of the questions I intend to ask so that they might be in a position to answer. The American Order M. 14 dated 8th February of this year, gives a list of commodities which cannot be manufactured. The list of commodities is divided into two groups, those of up to 22 per cent. nickel being contained in one section, and those of over 22 per cent. in the other. There is as a footnote, a list of prohibited articles which cannot be manufactured.
If we had lined up with the United States, especially for the export market, and if we had agreed that certain commodities or machines would not be produced during a period of time, it might have been reasonable to follow the American system. But we have not lined up with the United States. In fact, we have brought out an Order which limits the use of nickel steels to a maximum of 2406 8 per cent. Further, we have placed ourselves in the position that not only the United States, but France, Germany and Sweden will be able to produce goods for the export market of a superior quality to those which we will be able to offer because of the restrictions placed on these commodities by the Ministry of Supply and the Board of Trade.
I am sure that it is not the intention of the Minister to put our export business at a disadvantage compared with that of other countries. I am sure that, after a little reflection on the American Order M. 14 of 8th February, and a little comparison of that with the Order which is before us now; it will readily be seen that manufacturers here will be at a grave disadvantage compared with manufacturers elsewhere of certain types of machinery and other goods.
This Order starts by saying that, as from 22nd June, no manufacturer must fabricate any nickel steels for any of the articles on the prohibited list. Until 1st October of this year all such articles as are fabricated and completed can be sold, but after that date the articles must not be sold and the steel must not be incorporated into those goods. The position of manufacturers in this country is that no matter how they try and scheme to get rid of specially fabricated parts—specially cut sheets of material—and incorporate them into goods, they cannot do it in 12 weeks' time.
I refer to deep drawn steels, for instance, which are put through presses. Because the presses take a lot of setting up and press in large quantities, sometimes six or eight months' supply is manufactured at one time. It is reasonable on economy grounds that manufacturers should press these quantities at one time. They will not be able to get rid of these quantities in the period specified; namely, before 1st October of this year. I am sure that the Minister of Supply does not want any manufacturer to be saddled with parts which will be prohibited after 1st October and be unable to sell them or incorporate them into machinery or other goods for sale. I am sure that that is not his intention, unless, at that date, the Minister of Supply intends to commandeer the whole of the fabricated parts in stock. I am sure that he does not intend to do that.
2407 Therefore, there is good reason to suggest that the Minister should extend that period of time, if he can do nothing else, and give people more time in which to use up the stuff which they have in stock. It is easy to visualise a company with large stocks of partly fabricated pieces of machinery or other goods, asking, "What must we do by way of production in order to achieve what is necessary to get rid of our stocks?" In some cases, this may even affect the re-armament programme. People will not land themselves with goods in their stores after 1st October which they may not be able to sell to anybody because of this Order.
Then there is the problem of the redistribution of labour. If we are not able to use these goods after 12 weeks, the labour in industry will have to be re-distributed and given other work. Further, a most important point is that of the countries which are in a better position than us as a result of this prohibition Order. Does the Minister intend to permit countries which are in a better position than us to bring goods on the prohibited list into this country and to sell them here, or will he ensure that the goods which we cannot manufacture are not imported for sale by those countries which are in a better position? This will not hit all countries equally.
The United States have a very big commitment from the point of view of jet aircraft. They will require large quantities of nickel. Similarly, we will requires large quantities; but that does not apply to certain countries in Europe, particularly those in North-West Europe, who, if the Minister allows them, will be able to put goods on our market which we cannot manufacture ourselves. That would be wrong.
When one examines the Order and the list of goods which cannot be nickel-plated after the due date, one sees that there are some anomalies. I cannot resist the opportunity of mentioning one or two of them. For instance, it sounds silly, but in future it will be possible to nickel-plate the radiator of a motor car, but it will not be possible to nickel-plate the headlamps, because that is forbidden as I understand in the First and Second Schedules. It will be possible to nickel-plate the bumper bar, because it cannot be made of stainless steel, but it will 2408 not be possible to nickel-plate the electric horn of a motor car.
One will be able to nickel-plate the hub cap of a motor car, but not the rear lamp. These are the faults which emerge when one studies the Order. If I am wrong, perhaps the Parliamentary Secretary will correct me. A further anomaly is that one can nickel-plate the rim of a motor car wheel; one can nickel-plate the rim of a bicycle wheel; but one cannot nickel-plate the rim of a motor cycle wheel.
It does not seem to me that the motor trade can have had very much to do with deciding what can be used in the way of stainless steel and what can be nickel-plated after 1st October. The Parliamentary Secretary nods his head. Perhaps they have been consulted. Probably a lot of people who have not read the Order carefully do not realise what the position will be like when it comes into operation.
I cannot understand why we have not adhered to what I would call the old system of allocating materials in this country. Why have we not said that we require nickel for our re-armament programme and that firms must have it for that purpose; and, secondly, that we have secured sales of nickel for firms in the export trade since they must have everything we can spare because we still must earn as much money abroad as we can?
After that, why do we not take the rest of what is left and distribute it between all the firms, giving everybody a little bit in order to keep these different companies alive? This Order will close down many companies in this country, especially those who are engaged in manufacturing goods the nickel content of which is 100 per cent.
The Press statement on the Order, which is not included in the Order itself, states, as the Parliamentary Secretary knows, that in the case of articles sold in the dollar area, we must recover 15 times the value of the nickel in that commodity. It is easy in the case of some products, where the f.o.b. price is very low and the nickel content is small, but it hits very hard the man who is making an article which is 100 per cent. nickel, because it puts him right out of the market. In the soft currency area, we must recover 50 times the value of the nickel content 2409 As a result, many firms will not be able to function, but will be put out of business on the 1st October.
I think that is wrong. I think it is a bad procedure, and, in spite of the efforts made, and I believe that sincere efforts have been made, to operate with the small quantity of nickel that there is available, I think it would have been better if we had stuck to the methods which we have used in the past for allocating materials and had not gone over to the American type of order. In my opinion, this system, which provides a list of prohibited goods, is going to be entirely unsatisfactory.
In conclusion, I want to plead with the Parliamentary Secretary and with the Minister of Supply and the President of the Board of Trade to give consideration to the position as it is now. If they cannot do away with this Order and operate on the basis which I have suggested, may I suggest to them that they should give more time for the people concerned to get rid of their stocks? It is only reasonable, because the Ministry of Supply does not want anybody to waste anything which they have on hand.
I ask them to allocate sufficient material in order to keep these companies alive, because they will all be required for the re-armament programme at a later stage, and, if they get rid of their personnel in these shops—and it is the small men who are the backbone of the rearmament programme—or if they close down for one year, they will not be able to get their workers back very quickly.
Let the Ministries concerned give more time and go back to the old system. I plead with the Minister of Supply and the President of the Board of Trade not to leave these Orders in force in their present form, because they will do great damage to the industry and do no good to the Ministry of Supply.
§ 7.54 p.m.
§ Mr. Kaberry (Leeds, North-West)
I beg to second the Motion.
I should like to say that the extensive nature of the articles referred to in the Schedules to the two Orders makes it abundantly clear that, as from 22nd of last month, a considerable number of articles in daily use in this country are prohibited from having incorporated in them any nickel-containing metal. These articles extend over a wide variety of 2410 fields, from agricultural machinery, articles for domestic use, such as carpet sweepers and electrical fittings, to hospital furniture and fittings, various motor vehicles and details and radio and telecommunications. The main burden of my hon. and gallant Friend's case tonight was centred on three important points, which I would wish to underline.
First, if it has to be accepted that there is, at the present time, from whatever cause—and there may be argument later on as to the reasons for that cause—a shortage of nickel in this country, the question then arises whether this is the best way in which to deal with that problem. I think it has been represented to the Minister by the trade already that there is another way of dealing with that problem, either by the process of allocation which has been outlined by my hon. and gallant Friend, or, alternatively, by allowing metal to be used with a lower level of nickel content.
I understand that the Minister has said that the position is difficult this year so far as nickel is concerned, and that it is likely to be much more difficult next year, but I think one is entitled seriously to ask whether it would not have been better to allow a generally lower level content of nickel at the present time, in order to ease the burdens now falling upon this important industry.
The second question, which again is abundantly clear, is this. Has sufficient time been allowed to the manufacturers of these nickel-containing metals and articles manufactured from it? On the face of it, a week's notice was given. Was there an element of panic about it? It is true that the American order in similar terms was made in the United States as far back as February of this year, and that, between February and June, at any rate, our own manufacturers carried on not knowing very clearly the intentions of His Majesty's Government.
This has led to the proposition that, for the reasons which have been put very clearly by my hon. and gallant Friend, more time should still be granted to the manufacturers of these nickel-containing metals to enable them to complete the work they now have on hand, and to cope with the trade which they have been building up on the home market and for the export market.
2411 I can only speak with some degree of knowledge of one firm in this country. In the City of Leeds, part of which I have the honour to represent, one firm has built up over the past few years a large business in stainless steel products. On the other side of the river from this House, at the South Bank Exhibition, there is a large display of stainless steel products by various manufacturers in this country, and it is possibly the vain hope of the people now resident in this country who will visit that Exhibition that they may be able to purchase some of these stainless steel products, which leads me to my third point, concerning the Minister's intentions with regard to his licensing proposals.
By these Orders, the Minister may grant licences to manufacturers. What are his intentions with regard to manufacture for the home market? Is this pamphlet, which I hold in my hand, entitled "Festival of Britain— Stainless Steel Products of this Country," to be a mockery and a sham? Are we to see a little notice appearing at the Exhibition at the South Bank indicating that these are very pleasing exhibits, but that no person in this country will be able to buy one after 1st October of this year? That is a question to which I think the Minister should give a clear answer to the House.
Then, what are his intentions in regard to the export market? Many firms manufacturing stainless steel products, not only domestic articles, but hospital and general factory type articles, have built up over the past few years a large export industry, and many of them are very proud of the representation which they have throughout the world. What are the rules by which the Minister is going to judge an application for an export licence?
These are pressing problems because the existence of many of these firms is at stake. The problem arises of what is to happen to the labour employed. Are these firms, which have built up a specialised type of labour and craftsmanship, to lose their workmen because this Order is to become operative immediately? Alternatively, can the Minister indicate, if this Order has to go through in its present form, what alternative forms of production, such as those required for the re-armament programme, are to be offered to firms 2412 having experience of stainless steel products?
I am told that a large proportion of stainless steel is to be used in the manufacture of jet aircraft. Is there any vague hope of an assurance that if these Orders become effective and the manufacture of domestic, hospital and industrial stainless steel products is to stop, the firms affected will be allowed to retain their specialised labour through having orders for, say, jet aircraft components diverted to them? I hope that, in replying to the debate, the Minister will deal adequately with these problems so as to give some hope to the many firms most seriously affected by these Orders.
§ 8.2 p.m.
§ Mr. Emrys Hughes (Ayrshire, South)
I must confess that I have a certain amount of sympathy with the case put forward by the hon. and gallant Member for Pudsey (Colonel Banks) and by the hon. Member for Leeds, North-West (Mr. Kaberry), but I suggest that the time when their objections should have been made was when the re-armament programme was introduced, because anybody who realised the economic implications of that programme must have realised that this struggle for raw materials by British industry would arise. Here we have what is likely to be the beginning of a long series of complaints from British manufacturers. We find that the key raw materials for important products of the British engineering industry are being gobbled up in the re-armament programme.
As the hon. and gallant Member for Pudsey pointed out, there is the possibility of the stainless steel industry, which depends on its supplies of nickel, having to close down on 1st October. The hon. and gallant Gentleman asked what was going to happen to British industry and to the people employed in these factories. I submit that there is no very definite answer to that question.
If we are going to use the available nickel for the manufacture of jet aircraft and other articles required in the re-armament programme, it cannot be available for the cycle and motor industries, with the inevitable result that those industries will be at a disadvantage when competing with the products of foreign manufacturers whose countries are not so foolish 2413 as to handicap the whole future of their industries by having a grandiose rearmament programme. As a result of that position, we shall face an economic crisis.
It is no use hon. Members who supported the re-armament programme and all that it entailed coming along at this late hour and saying that it is going to handicap British industry.
§ Mr. Hughes
No, I did not. Indeed, I put down a Motion on the Order Paper as an alternative to it. Had the hon. Gentleman done likewise, there would have been no re-armament programme as far as I am concerned. The re-armament programme, like capitalism, contains within itself the seeds of its own destruction.
As I have said, this is only the first of a series of problems that are coming along. I know that hon. Members think I am ventilating my case against re-armament, but I can assure them that I am only following up its implications. The economic consequences of re-armament are only just beginning to be seen. The possibility of these factories being closed down on 1st October is only the beginning of the problem.
What is going to happen to those industries which depend on stainless steel, I do not know. All I know is that if we are going in for re-armament at a time when raw materials, such as nickel, are in short supply, we are inevitably going to be confronted with economic problems which will result in unemployment and other things which will affect the future of British industry. The hon. and gallant Member for Pudsey referred to supplies of nickel from America. Of course there is a shortage of nickel—
§ Mr. Hughes
Well, at any rate, I am going to refer to them, because they are of vital importance. 2414 The main theme of the argument regarding these Orders is that our industries are going to be short of nickel. That being so, I suggest that we go to the sources from which it can be obtained. As the previous President of the Board of Trade stressed, and as the right hon. Member for Ebbw Vale (Mr. A. Bevan) pointed out, vital raw materials, including nickel, are being cornered in America, with the inevitable result that British industry is being hopelessly handicapped.
§ Colonel Banks
It is quite untrue to say that the Americans have cornered nickel, and I think the hon. Gentleman should withdraw that remark.
§ Mr. Hughes
I will put it this way. What they have done is to absorb more nickel than is good for the British stainless steel industry.
§ Mr. Hughes
I am coming to that.
During one of our all-night Sittings I went into the Library and did some light reading. I picked up a copy of the "Financial Times." I thought it would be light reading, because I associated it with the right hon. Member for Bournemouth, East and Christchurch (Mr. Bracken). In it I read a long report by the Chairman of the International Nickel Company of Canada to the directors of that company, in which he said that it had been a splendid year for them because of the Korean war.
As a result of the Korean war, as a result of the great demand for nickel for the armament industries and for use in Korea, the International Nickel Company of America had a record year of profit. [Interruption.] That was the report of the Chairman of the International Nickel Company reported in the "Financial Times." If anyone thinks that it was wrong he can find out about it from the right hon. Gentleman the Member for Bournemouth, East and Christchurch.
I go a little further. The last paragraph of the report was more interesting still, because, after pointing out that the International Nickel Company had had such a splendid year as a result of Korea, the chairman went on to say that they regretted very much that they had lost one of their important directors during the year. The important director that they had lost was Mr. John Foster Dulles, who 2415 had enjoyed the prosperity of the International Nickel Company and who was one of the gentlemen responsible for getting us into the war in Korea. [Interruption.] Oh, yes, it is true. Mr. John Foster Dulles was one of the people responsible for getting this country into war in Korea. He was the adviser on Korea, and Mr. John Foster Dulles is one of the leading shareholders in the International Nickel Company.
Order. I do not think that the hon. Gentleman's remarks are directly related to the Motion before the House. He must, of course, relate his remarks to the Order.
§ Mr. Hughes
These facts are very interesting to hon. Gentlemen opposite. I do not think they expected to hear them when they brought up their Motion. I am suggesting that if they want to get stainless steel for industry they should approach the International Nickel Company of America and ask the Foreign Secretary to get in touch with Mr. John Foster Dulles; and if they want to get increased supplies of nickel for their stainless steel, which constitutes a very important key industry, let them join with us who have said—and quite rightly said—that if we pursue this re-armament programme we are going to get into great economic difficulties.
The Minister of Materials has recently been criticised because he made a speech welcoming the end of the Korean War and suggesting that we should slow down on re-armament. That is the only way the hon. Gentlemen can get nickel supplies—by supporting those of us who say that this re-armament programme is going to cause not only political dangers to this country but grave economic difficulties as well.
§ 8.12 p.m.
§ Major Cundiff (Manchester, Withington)
For a very short time I thought that the hon. Member for Ayrshire, South (Mr. Emrys Hughes) was going to agree with us, but now that we know that he does not agree with us he will forgive me if I do not attempt to follow him. I rise to associate myself with all that was said by my hon. and gallant Friend the Member for Pudsey (Colonel Banks) and my hon. Friend the Member for Leeds, North-West (Mr. Kaberry).
2416 With certain reservations we are not hostile to this Order—if we can be satisfied that it is in the best interests of the re-armament programme and the welfare of the country as a whole. We are most hostile to this Order if it is something which seeks to hide a lack of either foresight or prudence on the part of the Government, or if it is only yet another instrument of the Socialist charter which says that government shall be government by Ministerial decree.
Having said this, I want to make a fair approach to this problem, and I think, perhaps, that it may be some little help to the House—I hope it will be—if I say something about nickel, about its usefulness and the part that it is playing in engineering today. At this point I declare my interest in the manufacturing of diesel engines.
Nickel is not either a precious metal or a rare metal, but because of the very heavy demand at the present time it is a scarce metal, in spite of the fact that production is running at a higher rate today than ever before. Canada, a member of our British Commonwealth, produces more than four-fifths of the world's supply. Sweden, a friendly country, also produces a little. France at the present time is drawing part of her requirements from one of her Pacific islands, New Caledonia. The Russians are mining nickel ore in the Kola Peninsula, in the Urals, and in the Siberian Plain. As far as I can gather, there is no export of nickel from Russia, and it is perhaps rather significant that their whole production is going for home consumption. There are also small quantities of nickel in South Africa and Yugoslavia.
A proportion of the nickel which comes into this country is in a crude and unrefined state, and has therefore to be processed and refined. Only a very small quantity of nickel is used by itself, and that is for the production of certain small instruments. The vast bulk of metallic nickel goes to the steel makers, the iron founders and the non-ferrous foundries. There is no real substitute for nickel. When alloyed with steel, even in very small quantities such as 2 to 5 per cent., it produces a tougher and harder steel, a more ductile metal, and one with, of course, a vastly increased tensile strength. When nickel is alloyed with steel, and other metals such as silicon, chromium, 2417 vanadium and molybdenum, we in this country, from those metals, produce several hundreds of the very finest steels, which compare with anything else produced in the world.
Nickel plays just as important a part with the iron founders. One of the most specialised products of the iron founder at the present is nickel-silicon-chrome-iron. This is a combined alloy which shows very great resistance to friction and to abrasion, and is known in the trade as the ni-hard group. As far as I am able to discover, that group of ni-hard metals has nothing whatsoever to do with the right hon. Member for Ebbw Vale (Mr. A. Bevan), or any of his Parliamentary associates.
I hope I have not wearied the House with this dissertation on nickel. The question now arises: Why are we short of nickel, and why must we have this restrictive Order? Are the Government stockpiling this metal and thereby creating a false market? In 18 months the price has risen from about 2s. 8d. a 1b. to 4s. 1d. a 1b. today, and today we are paying, in round figures, £450 a ton. Is it a fact that the refining process at our command at present is inadequate to supply us with the necessary demands of industry? If that is so the Government must have known of this shortage many months ago.
I hope the Minister will also tell us whether any approach has been made to Canada to grant us increased supplies of either the crude metal or the refined metal. Is this restrictive Order a precursor to a new Order restricting copper and molybdenum? I say to the Government that re-armament must come first, whatever the consequences, but I think that the Minister should try to balance the many conflicting factors which face him at the moment.
This Order is a crippling Order. It will mean that a small section of the trade will be put completely out of gear. They may be closed down, and with that will follow the dispersal of trained craftsmen, who must seek employment elsewhere, which in itself is a very bad thing. In operation it is going to mean a reduction in our exports and, so far as the home market is concerned, there must inevitably be very severe repercussions. It seems to me that the Minister's attitude should be, "not how much can I cut these people 2418 down, but what can I do to help them with increased supplies?"
It is the thousands of small private enterprise firms which are today making the greatest possible practical and financial contribution to the welfare of our country. These people deserve every possible consideration. I appeal to the Minister to withdraw his Order for a few months to give the trade breathing space to turn round and try to re-adjust itself to the new conditions which may come, and in the meantime the Minister can look around to see what he can do to give the trade the increased quantities of nickel it so badly needs.
§ 8.22 p.m.
§ Miss Hornsby-Smith (Chislehurst)
I rise to support my hon. and gallant Friend the Member for Pudsey (Colonel Banks), who has moved a Prayer against these two Orders, because I am interested in the effect of them on the export trade conducted by firms in my own constituency which are the users of nickel and nickel-plating processes. Hon. Members on these benches who have spoken previously acknowledge the shortage of raw materials, a shortage which is aggravated not only by the re-armament programme but also by the Government's refusal in past months to buy up stocks that were then available.
I think it is agreed that it is not in the country's interest to cut our export trade, and particularly our dollar export trade, more than is absolutely unavoidable as a result of the re-armament programme. Since the war, there are very many firms—and I include several in my own constituency—which have been fighting their way at the behest and with the encouragement of the Government into the American market and other dollar markets.
I am particularly interested in these Orders because there is one wide field of domestic appliances where, by the ingenuity of our manufacturers, by skill and craftsmanship and, not least, the finish and quality of our goods and their performance, we have won markets against the fiercest American competition, not only in the sterling area but in the dollar area.
I support the opinion of my hon. and gallant Friend the Member for Withington (Major Cundiff), who pointed out that there are thousands of very small firms 2419 which may well be put out of business by these Orders. It is not the giant firm with millions of capital that is deprived of supplies; that firm gets immediate, alternative armament orders from the Government and is big and powerful enough to make its representations at the highest possible level. It is the small firm which cannot easily switch its men to other work or, indeed, obtain alternative armament orders which may well be driven out of business by the implications of and the incredibly short time-table given under these two Orders.
The dollar market likes the chromium-plated finish. It will not be fobbed off with cellulose or other substitutes, and if we cannot supply them with what they want, they will get it elsewhere. It is because of the disastrous effect of these Orders upon that very important branch of our export trade—the field of domestic appliances—that I add my protest and join in the Prayer moved by my hon. and gallant Friend. These goods for which we have won markets abroad include a with range of stainless steel equipment in the domestic and commercial fields, including irons, radiators, toasters, vacuum cleaners and refrigerators, small in their individual output but very large indeed in the aggregate and in the dollars they earn for this country.
If I may say a word about the Orders themselves, it appears to be the design and the desire of the Government to make Statutory Instruments as incomprehensible as possible. One used to level this charge at the lawyers with their "where-fors" and "hereunto's," but the legal gentlemen in Lincoln's Inn are but babes in arms at bemusing the public compared with the unholy three hundred who draft and decide the form of our Statutory Orders. I think there should be a degree of M.I.S.O., Master of the Interpretation of Statutory Orders.
An Order which tells us what we must not make, which is the form of these two particular Orders, is an open invitation to the "smart Alec" to find out what he can make without infringing the Order, either by some variation in design, by calling it a different name or by poring over a catalogue to find some item omitted from the Schedule with which to catch the Government out until the Government catch up with him.
2420 Some excellent examples of the grave anomalies which arise as a result of these Schedules were given to us by my hon. and gallant Friend the Member for Pudsey. I believe there is another, where under the Order as at present drafted we may not, without a licence, chromium-plate an electric iron, but it can be done with the stand which is sold with it. I offer that as another anomaly with which the Parliamentary Secretary to the Ministry of Supply can deal when he replies.
Some of the items in the Schedule are luxuries, some are essentials. In the present case, where we acknowledge the need for careful use of raw materials, why cannot we say what may be manufactured, and extend, on application, for proven claims? As it is, the manufacturer making an important export commodity, with orders piling up, with stocks in hand, and with possibly large stores, which have been put aside for orders placed this year for delivery next year, now finds himself, almost without notice, instructed that he may not complete those orders, or indeed, engage staff for carrying out this work, until he has obtained a licence, if a licence he can obtain, from the Ministry concerned. So these orders so dearly won may be thrown away, and workpeople may be thrown out of employment unless the employer is expected to hold them in idleness and employ them on cleaning up the works or some such work in the hope that possibly he may get his licence whereby he may continue the firm's output.
Reference was made by my hon. and gallant Friend to the Press handout which spoke of 15 times the value of the nickel content in the dollar market and 50 times the value of the nickel content in other markets being the basis upon which applications for exports will be made, but it has already been made plain by him how hardly that would operate on firms the content of whose articles varied very considerably indeed. Those with a small content would reap the benefit of such a computation; those with a large content would almost, without question, be driven out of business.
What is to be the machinery for the applications, and how soon will the manufacturers know whether or not they can 2421 continue in business with the industry which they have striven so hard to build up? During the time a manufacturer is waiting he may offend and lose a foreign customer. I believe that there should be some concession in this very rigid time-table to safeguard the very valuable export trade which has been established.
I add my protest regarding the differentiation between the restrictions imposed upon the American industry and those placed upon our own. We seem to have gone half way in lining up with the Americans but not all the way. We have fallen between two stools, and we have put our own manufacturers at a very severe disadvantage in that they may use only 8 per cent. content of nickel whereas the Americans can use 22 per cent. content. This will give a very substantial advantage to our American competitors and can only help to kill a valuable export trade which, as has been pointed out, has been boosted and advertised across the river at the Festival of Britain.
If our aim is to get the maximum effective production from a limited supply of this now very valuable metal, could the Government not see that this Order encourages a more economical use of the metal? As it stands, the Order does not do so. We have heard tonight of a new coating which is called tin-nickel, and which is one-third nickel and two-thirds zinc. I am given to understand that it eliminates the chrome coating and should result in a substantial saving in the use of nickel. Can the Minister give us any information how far this new process has advanced, and whether in certain fields of nickel usage it may be employed to advantage to produce the same number of goods for export with a smaller quantity of nickel?
I support my hon. and gallant Friend in this Prayer because the Order in its present form provides loopholes which hon. Gentlemen on both sides of the House desire to close. It does not encourage economy in the use of nickel where economies could be achieved and it will affect most seriously this branch of the export trade which many thousands of companies and industries in this country have been doing their level best to build up, in order to sustain our home economy.
§ 8.33 p.m.
§ Mr. Geoffrey Hirst (Shipley)
My hon. Friends who have spoken on this Prayer have made out a first-class and fully-substantiated case why the Prayer should be accepted by the Government, to give more time for the Government to put before us a much better thought out and better prepared statement of what is really needed. I want to underline one or two things that have been said.
I have grounds for feeling that there is an element of panic in the placing of this Statutory Instrument before the House. That is indicated, to start off with, by the dates. I do not think that the Government can have thought of the bad effect which legislation of this kind has upon industrialists throughout the country. Firms do not know, until they get the details, how the Order will affect them, because they do not know even the full extent of it. For it to come into operation, as it has done, on 22nd June, and then to say that by 1st October nothing more is to be sold, or even supplied, leaves insufficient time for industry to adjust itself to this far-reaching Order.
My hon. and gallant Friend the Member for Withington (Major Cundiff) said that there is no substitute for nickel. That is true, but in some cases it may be that another material could be used for part of the products for which nickel has formerly been employed. Where will those firms be in the queue for materials? Unless a firm is well known and has been on the books of a supplier for some time, there is very little hope of its getting additional or new supplies of materials. These firms will be very badly affected in that way. Nothing like sufficient thought has been given to the effect upon firms trying to find alternative supplies to replace those which are prohibited.
There is also the matter of components on order. What is the position in this case? What is the position of a firm which places an order, as it has to do, well in advance and then finds that the components come through on or about the completion date? Are the components to be wasted or will the firms be allowed to incorporate them in other products that they are producing?
With regard to exports, I share the alarm which has been expressed about the ratio 2423 of 15 per cent. in the case of dollar countries and 50 per cent. in the case of others. If that is genuinely intended, it is an enormously high ratio.
In the last few years many quite small firms which had never done any export trade before have been encouraged to take part, and employing a good deal of thought and initiative and taking some risk, they have entered the export field. This is a very good thing and we all applaud it. The Government will admit that the contribution made to our balance of trade by those new entrants into the export field has been by no means inconsiderable. Is all that effort on their part to be wasted? In place of all their high grade work, are we to have shoddy exports?
We do not believe that this matter has been thought out properly. There may be a shortage of nickel, but do we need to panic-legislate? The Government have given many instances of bad planning. Surely in a matter of this nature they could have thought the thing out more carefully and given industry proper time and full consultations to avoid this monstrous damage, which will in many instances mean a real infliction of harm upon firms which cannot adapt themselves and will have to close down or will be so grievously affected that they will no longer be able to contribute to the increased productivity which we must still have.
§ 8.38 p.m.
§ Mr. Harmar Nicholls (Peterborough)
It was far too much to expect the hon. Member for Ayrshire, South (Mr. Emrys Hughes), to let this opportunity pass without riding his hobby horse, his policy of rather sordid cowardly despair. I cannot understand how the Government can bring themselves to continue to accept his vote when on one of the most important of their policies he finds himself in such complete disagreement.
We ought to make quite clear the motive behind the tabling of the Prayers tonight. We recognise to the full that urgent priority must be given to the rearmament programme, but we are not satisfied that all the considerations affecting the industries in their other spheres have been taken into account in the preparation of these statutory instruments. We are discussing the matter now to make 2424 absolutely certain that the minimum of dislocation is caused to the industries concerned, to the export trade and to the employment of our people by the carrying out of the priority system. If that is not the job of the House of Commons, I do not know whose it is.
Sometimes the House is abused and called a talking shop. That is what it should be and what it was intended to be. We are here to talk about things and to produce evidence from every angle, so that by the time what we discuss becomes the law of the land there is no shadow of doubt that we have the best possible remedy for the ills which have to be faced. And so it is to pursue thought along those lines that these Prayers were tabled by my hon. Friends.
After listening to the proposer and the seconder and to my hon. and gallant Friend the Member for Withington (Major Cundiff), I think everyone will admit that they have brought thought to this subject which will make the people who have to apply the instruments much better informed than they could have been if we had not had the Prayers discussed tonight.
It is quite clear from what we have already heard that when the present stocks of components are exhausted a wide range of household goods, of electrical equipment and road vehicles will assume a look of war-time austerity that would not have been thought possible when the war ended in 1945. We want to be quite certain, before we approve these instruments, that the amount of austerity which will be inflicted is really necessary.
The first point that should be emphasised is that this will affect many firms to such an extent that they may well be pushed out of business. For example, firms engaged solely in making badges and ornamental jewellery will almost certainly be put out of business, and pin and safety pin manufacturers will have little to go on.
§ Mr. Emrys Hughes
Surely the hon. Gentleman does not suggest that in a time of crisis we ought to allow ornamental jewellery?
§ Mr. Nicholls
The hon. Member has such little patience that he has anticipated the point I was just reaching. From our experience in the last war we know the great contribution that the jewellery firms 2425 of Birmingham were able to make to rearmament production then. We know that their special craft and skill was turned at a minute's notice to making vital components for the war machine.
If we meet the same crisis again we might well want that same quick switch-over from those same skilled craftsmen. So I say to the Parliamentary Secretary that we want to be quite certain that before we push these firms out of existence, before we allow the skilled craftsmen to be disbanded, we do not bring a greater hardship on ourselves by putting out of reach the potential help they will give to us when we get to other parts of the re-armament programme.
We have to face up to the fact that if this instrument is applied as it stands they will be pushed out of business. We have been told that fittings for cycles and cars will have a dull finish which will take away the joy of possession in this country and will take away our chance of expanding our export markets. We know it is possible for the Minister to issue licences which will keep some of these firms in existence and which will help them to maintain their export markets. We want to be certain that he uses that power to issue licences with realism.
If licences are allowed only for their exports, it means they will need two production lines in their works, one for export and one for the home department. That would mean that British production costs would go up so much that we might lose export markets because our goods could not compete on the ground of price. So we ask to be satisfied that he will give full consideration to the applications which will be made from these firms so affected.
A typical example that has been brought to my notice is that of a firm making mechanical lighters. They have made it quite clear that if they are not allowed plate for the home trade their production will have to stop and their export contribution, however small, will have to go by the board. Let us be quite certain that is necessary before we push them to this extreme. A vital example can be found in Walsall. I am rather surprised that the hon. Member for Walsall (Mr. W. Wells) is not here to say a word on this matter, because old-established firms in that town are vitally affected. This is the home of 2426 saddlery and harness, which carries with it such an important export section.
There is in Walsall a firm, established for more than 120 years, that have been exporting bits and stirrups. It has been made quite clear to them that their important market in the United States will not take any substitute or iron. The owner of the firm has made it quite clear, I believe, to the Minister that 85 per cent. of their production is on export. They certainly would not be able to pass the test of 50 times the value of nickel in arriving at their export selling price, but 85 per cent. of their export is dependent upon a very substantial allotment of nickel being given to them. Before this firm, more than 100 years old, is pushed out of business, we want to be quite certain that there is absolutely no alternative.
§ Mr. Pannell (Leeds, West)
The hon. Member said he was surprised that my hon. Friend the Member for Walsall (Mr. W. Wells) was not in his place. Did the hon. Member give him notice that he required him to be in his place, or are the firm using the hon. Member for Peterborough (Mr. H. Nicholls) as their agent in this rather than the Member for their constituency?
§ Mr. Nicholls
We can expect the hon. Member for Leeds, West (Mr. Pannell) to have a rather unpleasant explanation for my reference to Walsall. The reason why I referred to Walsall is that the well-known newspaper there thought fit to give headlines to the effects of the Order, and the local Chamber of Commerce have given reports, which, again, have been headlined, showing the effect it would have on the various firms in that town. I should have thought that that would have been sufficient notice for any hon. Member to want to be in his place and to make quite certain that the industries in his constituency were not having any unnecessary damage inflicted upon them.
What I am saying is that when the applications for licences are made, we hope that they will be treated with sympathy and that, if possible, the Minister should grant an open licence to a whole series of orders rather than put them to the trouble of having to apply individually for all their various cases, 2427 with all the delay and extra work that that would entail.
I reinforce the point which has been made that perhaps the Minister is not in full possession of details of the full effects of the Order upon various industries, because the many industries themselves have not as yet realised how badly they will be affected. In my own constituency, I wrote to the industries which I thought were likely to come under the terms of the Order. The replies of all of them contain such phrases as these, which I have picked out to pass on to the Minister:We have no t yet had a copy of the Order, and so cannot comment upon it.Owing to the short notice, we have had no opportunity of inspecting the Order, so we do not know how we are likely to be affected.As the publishing of the restriction is so very recent, we must tell you that full implications are not entirely known. Only after close study of the Order shall we know the full measure of its effect.If that is general, if that experience covers the whole of the country—and I have no doubt that it does—the appeal that the effect of this instrument should be delayed might well be worth while. It may be that the Minister will have information later that he does not have today.
I reinforce also what my hon. Friend has said about the difficulty of understanding statutory instruments. On questions such as this, it is a great pity that we cannot have a sort of White Paper to precede the statutory instrument so that we may discuss it in some detail and understand what it means. We could not do worse than take a leaf out of the book of the United States of America. I have with me a copy of the American M.14, which is the equivalent of our statutory instrument. In it there is greater coherence, and they appear to go to much greater trouble so that the people likely to be affected shall understand what it is all about. [An HON. MEMBER: "They are much more ignorant."] They have set out very clearly, for example, the various headings:What this Order does.Definitions.The nickel forms and products to which this Order applies.Application of Order.Use of nickel.2428 and so on. From those various headings one has a very clear understanding of what it is all about, as distinct from the legalistic jargon which seems to surround not only the statutory instruments we are discussing, but so many of the statutory instruments which we have to discuss from time to time.
I think it right that the House should give consideration to the question of whether we are quite certain that manufacturers in this country, in particular exporting manufacturers, are going to face unnecessary competition from the United States of America because we have placed the nickel content too low. Already we have had described to us how the U.S.A. manufacturers can use up to 22 per cent. of nickel content, whereas we are kept down to 8 per cent. on our products. This by itself makes quite clear that we shall be competing at a disadvantage in the world market, unless something is done about it.
I was interested to read in one of the very responsible newspapers of this country the reasons for this Order. It is of some value. The newspaper said:It was generally known that restrictions were largely imminent because the United States had imposed them in their country. It could hardly be expected that America would tolerate the appearance of plated and nickel based manufactures on their home market whilst their own users were barred from offering competitive goods.Bearing in mind that even this year we are only likely to have 40 per cent. to 50 per cent, of nickel available as compared with last year, whereas in America it is likely to be 65 per cent. of what they had last year, I should have thought that Britain "could hardly tolerate the appearance of better plated and better nickel based manufactures in their traditional world markets from other countries while our own manufacturers were barred by the force of law from anything like equal terms of competition." I am not making that observation in the atmosphere created by the hon. Member for Ayrshire, South, or producing any anti-Americanism. What I am asking is that the Minister in this country shall fight very hard and with all the tenacity he can produce to see to it that in the varied contributions our countries make our manufacturers are not placed at an unnecessary disadvantage with the United States.
2429 There is another point to which I hope the Parliamentary Secretary can give a reply. It is in connection with the important contribution that diesel car exports have to make to our balance of trade. I know that already valves for motor cars, which are manufactured from stainless steel, are not affected by this statutory instrument. I should like the Parliamentary Secretary to assure me that the steel cylinder liners have the same preference as the valves. They should also be made of stainless steel as they have to undergo the same treatment as an exhaust valve in an engine which operates on low octane spirit.
Mr. Dames (East Ham, North)
Could the hon. Member read the last part of his speech again so that we can all get it?
§ Mr. Nicholls
I said I want the Minister to give a clear reply on whether the same preference is given to the cylinder liners as is given to the valves. I hope he will answer "yes"; otherwise it will create a great deal of difficulty on the technical side of engine production.
That is the general case we wish to submit from these benches. We feel that only good can come from a clear explanation from the Treasury Bench of how this instrument is likely to be put into effect. If as a result of this debate we have convinced the Minister that some good may come from delaying the effect of the instrument, if only for a month, and if we can get from him a clear statement of what efforts will be made in preserving our exporters as compared to American exporters, I am certain that the time spent in discussing these Orders Will be far from wasted.
§ 8.55 p.m.
§ Mr. Nally (Bilston)
I rise primarily to suggest to the House that it is a little unfair for the hon. Member for Peterborough (Mr. H. Nicholls), in the absence of my hon. Friend the Member for Walsall (Mr. W. Wells), to say what he did about him. If we are to have that sort of comment made in the House it is equally worth putting on record in HANSARD that during the whole of the speech of the hon. Member there were ten—I beg pardon, now 11—Members of the Opposition present. It is also worth putting on the record that many of us share the view of my hon. Friend the Member for Walsall that it really is not 2430 terribly worth while for people with something more important to do to sit here listening to a handful of Tory Members talking about Motions which they have no intention of pressing to a Division because they have not sufficient numbers here to put up a respectable show.
§ Mr. H. Nicholls
What better work can a Member of Parliament be doing than discussing this Statutory Instrument when otherwise the House will rise and we shall all go on our respective ways and do nothing in particular?
§ Mr. Nally
The hon. Member might well be in the Library studying some of the problems of Peterborough as anxiously as my hon. Friend seems to be studying the problems of Walsall. I should regard that study as being well worth while.
It is surprising that there appears to be between the hon. Member for Ayrshire, South (Mr. Emrys Hughes) and the Opposition not some points of difference; the really surprising thing is not how different they are but how much they have in common, and how often when hon. Members opposite were expounding with great care how important it was to keep this form and the other form of civilian production going, and to continue to make lighters, etc., there were subdued but undoubtedly definite "Hear, hears" coming from the direction of the hon. Member for Ayrshire, South.
The real truth is that in these matters there is this bond between the Opposition and my hon. Friend, that in their ways all are anarchists, but in the case of the hon. Member for Ayrshire, South, he is a pacifist anarchist, while the Opposition are fighting anarchists. They continually reproach the Government because they are making only "slow and painful pro-gross towards the building up of our armaments" and on the very same day they reproach the Government because in a spirit of urgency the Government take certain steps to restrict the consumption of metals and try to apply the consumption of those metals to needs which are more likely to serve defence than some of the needs which they are serving.
§ Colonel Banks
I do not think that the hon. Member was present in the House when I made the opening speech in this debate. Had he been present he would 2431 have appreciated that the purpose of my getting up to speak on this nickel prohibition Order was to point out a way in which we could have achieved the same economy, could have achieved everything we desire to achieve but by a different way, by using a different system. I sympathised with the Minister and the Parliamentary Secretary sitting on the Government Front Bench in their job of handling this matter. It is most unfair that the hon. Member should get up, not having heard my speech, and call me an anarchist.
§ Mr. Nally
I regret that I came into the House exactly as the hon. and gallant Member was resuming his seat. In response to his request I acquit him completely of any responsibility for all the rest of the speeches to which I have listened. But If am certain that he would agree that whale I accept what he says, and apologise most sincerely for not being present when he was moving the Motion, we on these benches, when we hear a string of four, five or six Tory speeches are, as good democrats, entitled to pay as much attention to what we have heard as to the one undoubtedly much greater, mightier and more common-sense speech that we happen to have missed.
The House, in the speeches I heard— although I am certain it does not apply to the speech I did not hear— has been bathed in an almost high tide of crocodile tears, none the less repellent because most of them came from the hon. Lady who does everything charmingly including the shedding of crocodile tears. One argument was that the small man who has built up his business, was likely, by the full impact of these Orders, to be unable to carry on. That surely is one of the risks implicit in a dangerous situation such as we now have.
After all when this House, with the exception of a few of us, and I make no apology for it now, believed that conscription was a thoroughly bad thing on military grounds, we were overwhelmed, and every single Member of the Conservative Party voted in favour of conscription. Surely, if we favoured doing something with the life of a youngster from 18 to 20 which we believed to be unfortunate but unavoidable; if we take him away from his home and normal pursuits for three years because of certain admitted 2432 dangers which we have to face, surely it is a bit difficult to maintain that point of view and yet talk about how difficult it would be if somebody is not able to carry on with the production of cigarette lighters as he has been accustomed to do in the past. We must have a sense of proportion in these matters.
I am very surprised that hon. Gentlemen opposite, and the hon. Lady, should make it a point of complaint that in the American economy American manufacturers generally are working roughly on the level of 22 per cent., as against the 8 per cent. proposed. As I understand it that complaint was made. It is from far-sighted American statesmen, who recognise the urgency of the present situation, that we have the greatest and most grievous warnings about the extent to which in the future the American war effort may be affected by the extent to which valuable metals and materials are being absorbed in civilian production.
We are urged by the hon. Member for Peterborough (Mr. H. Nicholls) in a most friendly way—I do not want to misunderstand him about this—that we must stand up to the Americans. After all, in the last week there was the little matter that Britain is now putting into production a rifle which is admittedly the best rifle for ordinary service purposes ever produced. We said to the Americans, "We are happy about this rifle, we think it is a good job and we would like you to adopt it." The Americans did not, and then from the other side of the House there was a howl of fury because we do not drop production of this new and better rifle because the Americans want to stick to their not so good one.
When it is a case of manufacturers or traders of some sort, a demand is made that we stand up to America, but when there is the equally important matter of a rifle—it is particularly important if one happens to be using the rifle in the field —and whether it is a good rifle or not, there are criticisms from hon. Members opposite. The Prime Minister and the Secretary of State for War are bitterly attacked and threatened with votes of censure because they actually had the impertinence to say to the Americans, "We rather prefer our rifle to yours. We think it is better for our chaps and we are going on producing it."
2433 It is true, and there is some merit in the argument put from hon. Members opposite, and it ought to be admitted quite frankly, that these two Orders combined represent difficulty for any manufacturer who has to use this particular metal. In my own constituency there are cases where quite clearly the full operation of these provisions will cause difficulty. It may well be that some of these difficulties could have been avoided had trade and industry been given a longer time in which to absorb the effect of these Orders.
But, after all, the strength of that case lies in the extent to which one accepts that we are in a dangerous and difficult situation which might blow up at any time. I think there is general agreement that we live in that sort of situation. Therefore, what could be done in normal times—say, in between the two wars—by way of giving long notice about certain actions which the Government intended to take, is not possible now because we are not living in that sort of world. This country is a small island which does not produce a lot of the raw materials it needs, and there is bound to be urgency in these matters. The Government cannot be blamed for consequent difficulties which arise.
In addition to the difficulties caused to the manufacturer, we ought to remember that there are ordinary, decent working folk, as one or two hon. Gentlemen opposite have said, who may have to change their jobs because of this situation. The hon. Member for Peterborough has spent most of his business life around Walsall, Bilston and Wednesbury. It is all very well talking now about how unfortunate it will be if working people have to change their jobs.
What he overlooks—and, of course, he is perfectly entitled to overlook it—is that, in September, 1939, when the war began and Britain faced up to its greatest peril, in the areas of Darlaston, Wednesbury and Walsall we had something like one out of every 10 of our total adult workers registered as unemployed. It comes a little hard now at this stage to hear hon. Members opposite, in putting up a case against the Government, trying to present a picture that they and their party are the ones who have close to their hearts the welfare of the little working people 2434 of Darlaston, Wednesbury and similar parts of the country.
It is true that these Orders cause difficulties, it is true that they will necessitate adjustment on the part of both manufacturers and work people, but if the sturdy spirit of resilience and ability to adapt itself which is the cardinal feature of private enterprise, is brought to bear, then certainly all these difficulties can be overcome. Who knows what wondrous instruments for the national good the manufacturer who has made cigarette lighters may not turn out by applying these gifts, these brilliant gifts which, if he is a friend of the hon. Member for Peterborough, he undoubtedly possesses?
§ 9.9 p.m.
§ The Parliamentary Secretary to the Ministry of Supply (Mr. Michael Stewart)
We are all indebted to the hon. and gallant Member for Pudsey (Colonel Banks) and the hon. Member for Leeds, North-West (Mr. Kaberry), for the careful and thoughtful way in which they put this problem before the House. Perhaps they felt a little secret regret that their care and moderation was not universally reflected in some of the speeches which followed from their side of the House. I hope to show that the words "monstrous," "disastrous" and "panic" as applied to these Orders and to this whole problem, have really no relation at all to the facts.
The two hon. Members must also have felt a little uneasiness at the intervention in their support of my hon. Friend the Member for Ayrshire, South (Mr. Emrys Hughes). I think he will agree that I cannot pursue the much larger issue than the use of nickel which he imported into this debate, as, indeed he imports it into so many debates. On his contribution I would only say that he spoke of the question of who was responsible for the war in Korea. I could not help feeling that his remarks on that topic were directed, as his remarks so often are, to the wrong address. I myself take the view that responsibility for armed conflict lies invariably with the aggressor, and that we are now living in a situation created by that aggression.
That really brings us to the heart of the matter which we have to consider. Whatever we say about the details of this Order, we cannot escape from the fact that re-armament requirements have 2435 created an increase in the demand for nickel which one could not hope to match by an increased supply. One hon. Member, I think the hon. and gallant Member for Withington (Major Cundiff), urged that the Government should take whatever action is possible to secure increased supplies. Of course, there are steps that can be taken in the field of international action towards that end, and the Government will not neglect them, but it would be an over-simplification of the problem to suggest that action of that kind could by any means bring up the supplies of nickel to the old demand, plus the additional demand which re-armament has created.
I entirely agree with the speech of my hon. Friend the Member for Bilston (Mr. Nally), who appeared to be rubbing in to some hon. Members opposite the fact that, if we accept the re-armament programme, it is just no use at all talking as if there were some way of arranging things whereby there would be no unpleasant consequences and no difficulties for anybody. We should hope that, in meeting the shortage, we shall keep difficulties to a minimum, but there are bound to be difficulties, even hardships. Nor can we, as the hon. Member for Peterborough (Mr. H. Nicholls) seems to think, proceed in a matter like this on the basis of absolute certainty.
If we were to say to users of nickel, in this or any other measure that may be necessary as the result of re-armament, that we will not take this, that or any other step unless we are absolutely certain that it is bound to turn out as we hope, we should never take any steps at all towards re-armament progress. In a situation like the present, one is bound to proceed to a large extent, not on absolute certainty, but on a judgment of the probabilities and likelihoods, and, whether we like it or not, there is no escape from that fact.
I turn from these general considerations, which we must always bear in mind, to the application of the details and the procedure of this Order. We are faced with a situation created by the fact that there is an increased demand for nickel and no probable increase in the supply. The hon. and gallant Gentleman who moved this Motion asked if we had given consideration to the fact that there would be some 2436 effect on the demand for nickel from the use of certain other metals being restricted.
In framing this Order, and in considering the whole matter of the demand for and use of nickel, we did bear that point in mind, but I think the hon. and gallant Gentleman will agree that it is not a matter that lends itself to any exact statistical record. One can only regard it as a prominent imponderable factor. When I said that we have taken it into consideration, that is one way of saying that we have based our judgment and estimates upon that factor, amongst others, recognising how difficult a factor it is.
We are led inescapably to the conclusion that we have to restrict the uses of nickel and the hon. and gallant Member for Withington, who gave us such a learned discourse on this subject, underlined in every word he said about these matters the need for a measure of this kind. As to the details and working of the Order, a comparison has been made between this Order and the comparable American order, and reference has been made to the effect which this Order may have on the export market.
In the first place, I should mention that the United States' order, over a wide field, imposes a restriction, not on articles containing a 22 per cent. content, but on articles containing as low a content as 6 per cent. That was a fact that appeared to be lost sight of during the debate, and it means that, in effect, the difference between the United States' order and our own is by no means as great as some hon. Members have supposed.
§ Mr. H. Nicholls
But it is a fact that there is a very long list of articles in the United States' order in which they can use a 22 per cent. content, compared with an equivalent of 8 per cent. in ours.
§ Mr. Stewart
I am not denying that. What I am saying is that over a wide field, the United States' order refers to between 6 and 22 per cent. Of course, one cannot measure precisely the effect on two widely different economies of orders for the restriction of nickel. It depends on the whole set-up, history and arrangement of industry. But I think we ought to notice that the United States has already imposed on itself quite substantial restrictions in the use of nickel, and 2437 that when we impose restrictions on ourselves—although they cannot be exactly compared and likened to the American—we are not placing restrictions on the whole field at anything like a disadvantage in comparison with them.
I now want to consider certain other aspects of the Order and of the policy for implementing it, which bear on the export question. In the first place, I have drawn attention to the fact that the House has rather tended to exaggerate the difference between the American order and our own. Secondly, if we look at the actual Schedules in our own Order—and I am bound to say I do not find the Order as unintelligible or as difficult to follow as it appeared to be to the hon. Member for Chislehurst (Miss Hornsby-Smith); I do not expect a list of several score of uses of nickel to be an immediately obvious document, but I would say that as orders go, and in view of the unavoidable complexity of any document that could be produced on this subject, these two documents are really quite easy to understand and to follow—we find there are certain articles which, at a first glance, one would think would obviously be included in the list, and which are not.
For example, there are the handlebars of bicycles. No necessary functional job is performed by having nickel there. It is really ornamental. But, for that very reason, it is important in the export market, and consequently it does not find a place in the list. I give that as an illustration that in making up the list of what uses should be prohibited and what should not, we have borne in mind the needs of the export market. Of course, as the hon. Member for Peterborough pointed out, and as, if I may say so, occurred to us when framing the Order, we could not require the manufacturers to maintain a double line of production, one for the home market and one for the export market, at any rate, not with regard to that article. With others it might be possible to do it without any dislocation.
Thirdly, there is the so-called conversion factor which we shall consider when granting licences for export. We are taking this further measure to ensure that the article may be exported if it does not contain one-fiftieth of nickel or nickel alloy if destined for certain non-specified markets, or one-fifteenth if destined for dollar or sterling Commonwealth markets 2438 I am sorry if by a slip of the tongue I have got it wrong, but I think the sense of it is clear to the House. We shall permit the export of articles if the nickel or nickel alloy content is less than one-fiftieth of the total of the article if it is for certain markets, and less than one-fifteenth if it is for the dollar or sterling Commonwealth markets.
§ Mr. R. S. Hudson (Southport)
Surely, the whole point of the 50 per cent. conversion factor is not the actual quantity but the value of the nickel? The hon.. Gentleman is talking about quantity.
§ Mr. Stewart
It is, therefore, as the right hon. Gentleman will appreciate, easy to make slips of the tongue; but I think we all are perfectly aware of what is under discussion. One of the' effects of the conversion factor—and this, is the point which the hon. Lady the. Member for Chislehurst raised—is that it is an encouragement to manufacturers; for export to consider what economies can be made in the use of nickel. Clearly; the use of any of the methods she described—though I am not sure all of them can be so rapidly adopted as she seemed to suggest—the use of any of those or of any method which gives an economy in the amount of nickel used makes it more likely that the article will come within the regulations for the granting of export licences. So in that field, at any rate, there is both a provision to, help to safeguard exports and an encouragement to economise in the use of nickel.
Then, I think, we should also notice that we are engaged in negotiations with the O.E.E.C. countries to secure an agreed list of prohibited articles. That will obviously be a very important development, and if we can secure reasonable agreement on that point, it will remove many of the objections that may be raised from the point of view of the export of these 2439 articles. It may be asked why we did not seek first to reach agreement before introducing an Order of this kind?
§ Colonel Banks
The position with regard to the O.E.E.C. countries cannot be compared with our position here for the simple reason that we have a very big re-armament programme and those countries may have a very small one, and so their nickel consumption may be very much less than it is going to be in this country or the United States and for that reason they are not going to forbid themselves the use of nickel where they use it for export purposes.
§ Mr. Stewart
I do not think that we can conclude that they will be entirely without regard to their obligations as members of O.E.E.C. or, indeed, as members of the Atlantic community. It may be asked why we did not seek to secure agreement of that kind before making an Order of this sort? But if every nation in the Atlantic community is going to approach the problems of re-armament in that spirit, we shall never reach any decisions of importance at all, and I think that the House will agree that we were right, particularly with the example of the American order before us, to take at any rate some steps to economise our own use of nickel and to seek, by that example, to get agreement with the other countries concerned.
We have therefore, I think, quite a formidable list of measures. Partly in the nature of the Order itself, and partly in the freedom that will be given by the granting of licences, and in the way we shall operate the licensing system, although inescapably there must be some impact of the Order on the export trade—fundamentally it is not the impact of the Order: it is the impact of the re-armament demand for nickel on the export trade—and although that cannot be avoided, we have done our best to see that that injury is kept at a minimum, and presented in a form which is least objectionable to industry.
Now, one of the major points raised concerned the period of grace during which manufacturers may continue to make articles or plate articles with stocks that they have at present. Clearly, if we fix that period too long we should waste nickel by not bringing in restrictions at as early a date as we ought. If it is fixed 2440 too short and one says "We will get out of that difficulty by special licence and special arrangements," we run the risk of having to do the greater part of the work by special arrangements, with an unnecessary administrative burden. The problem is to strike the right period between those two extremes, recognising that what may be a right and reasonable period for some firms and some branches of industry may be quite unsuitable for others.
We have here a period of slightly over three months. Now that was not a period arrived at arbitrarily by the Government. The making of this Order and the inclusion in it of this provision followed the most careful consultations with the industrial associations concerned. I mention particularly, because it bears specially on some of the points raised by the mover and seconder of this Motion, the Stainless Steel Fabricators Association. It was after those consultations that we considered the present limit to be, on the whole, a reasonable one.
§ Colonel Banks
The time factor never entered into those negotiations. No one was aware of the time factor until the Order came out.
§ Mr. Stewart
The hon. and gallant Gentleman is mistaken about that, if we are speaking of the same thing. I am speaking of the period from the coming into force of the Order until 1st October, during which they may make articles if they have stocks of partly processed materials.
§ Mr. Stewart
The hon. and gallant Gentleman knows very well that neither the Government nor this House ever agrees that it cannot bring forward measures unless it has obtained the agreement of outside bodies. It would be wrong to suggest that we had got their agreement; and it would also be wrong to suggest that we had their disagreement or opposition. I think the correct way of describing it would be to say that there was a general feeling that this was not an 2441 unreasonable period, provided there was a willingness on the part of the Government to extend the period by the granting of licences in cases where there were special reasons. What I am trying to establish is that it would be quite wrong to have the same period, without any flexibility, for the whole of industry. We must start off with a general period mentioned in the Order, and then be prepared to deal with a number of special cases by the granting of licences. Subject to that, the period in the Order is a not unreasonable one.
We shall, however, have to be prepared to grant licences where, for example, in order to retain skilled labour in employment, it is desirable to spread the consumption of the stocks in the possession of the firm or industry over a considerable period; or where—a more common case —the whole practice of the firm or industry is to amass stocks and have them lasting over a longer period, or where the whole cycle of production is longer than could properly be covered by this Order. Those are exactly the considerations we shall have in mind when granting a licence of such a nature as, in effect, to continue this period of grace.
A number of points were raised about the effect of this on certain firms, and I am afraid I could not help thinking that somewhat exaggerated language was used. True, some firms are likely to be peculiarly hard hit by an Order of this kind, but I am quite sure that it is not correct to suggest that there will be a very large number of small firms facing ruin as a result of this Order. It may occur in some cases, and it is one of the things about which we shall have to take care. One of the grounds upon which we should be prepared to grant a licence —although it would be necessary to scrutinise the facts with great care—would be if the rigid enforcement of the Order would impose severe personal hardship. One could make quite a list from one's own personal knowledge of firms where that might occur, but to suggest that that is a general or representative picture of the industry is quite incorrect. Firms of this kind will very naturally be interested in the question whether they can obtain alternative employment for re-armament purposes, and, in the end, that is the whole nature of the rearmament drive—that there is a shift of 2442 labour effort and resources of all kinds from one set of uses to another.
We cannot, obviously, give a guarantee that any firm which finds itself in difficulties as the result of the operation of this Order can have those difficulties removed by having re-armament work offered to it. That is quite impossible. If life were as simple as that, many of our problems on re-armament would melt away. What, of course, we can say is that if a firm is placed in difficulties by the operation of this Order, and if it is competent for re-armament work, it has a very strong case indeed to be considered for an offer of work of that kind.
There are suggestions that if we had taken the advice or followed the initiative of the industry we should not have proceeded by an Order of this kind but by quite a different method. There is a way of throwing doubt on the wisdom of the method we have adopted and one or two anomalies were quoted from the Schedules as, for example, that of cylinder linings to which the hon. Member for Peterborough referred, and he will be glad to know that the answer is "Yes." Some anomalies are quoted apart from the parts of a motor car which may or may not be nickel-plated. It is interesting to know that when we were discussing this matter with the motor trade they were inclined to the view that they would rather be told, "You can have a certain amount of nickel and no more and use it how you like."
§ Mr. Stewart
What we did in their case was to reach a kind of compromise between 'hat position and the position of listing prohibited uses, on the understanding that they would exercise economy in the use of nickel, and we, in return, undertook to follow very closely their suggestions as to the list of articles which should appear in the Second Schedule. I confess that I do not know why one article on a motor car, which was quoted by the hon. and gallant Member who moved this Motion, is nickel plated and another is not. There we followed the advice of the trade itself. No doubt there were special reasons for it.
On the question of the approach by the method of prohibited uses and not by the method of allocation, the hon. and 2443 gallant Gentleman who moved the Motion spoke as if we had overlooked a sort of old and tried method to which we were accustomed. In regard to nickel, as in the case of many other metals, we have experience of dealing with them only in time of war when practically the whole of the uses were for armaments. What we are required to do now raises a much more elaborate problem, requiring a good deal more consideration—the problem of balancing how much should be for re-armament, how much for export, and how much for home uses, and then discriminating again between certain export uses and certain home uses. Doing that does not apply an old and tried method. It involves, in the field of nickel and a great many other metals, entering into an entirely new process.
I do not think that we can accept the argument that we have thrown aside a method with which we were familiar. Of course—and this was foreshadowed by the Chancellor of the Exchequer in his recent statement—it may prove to be necessary—and I have mentioned already the uncertainties that surround the whole subject of re-armament—to go somewhat further than prohibited uses, and, ultimately—I am not now speaking of any intention but of what may prove to be desirable—to introduce a more drastic scheme and one more on the lines suggested by hon. Members.
I believe that it was wise in the face of the present situation, when the rapid increase in the demand for nickel is far greater than one can hope to meet from the available supplies, to begin by saying: "We know perfectly well that whatever method is adopted there is one result that ought to be obtained, namely, that there are certain uses of nickel which are not essential and which ought to be rubbed out." Whatever the method used that ought to be the result to be aimed at. The method we have used does give that result immediately.
§ Mr. Stewart
I think I have dealt with how the Order may be administered. In view of that and in view of a the general situation which imposes a need for economy in the use of nickel, I hope the 2444 House will accept that this Order is a workmanlike and reasonable attempt to deal with the situation.
§ Major Cundiff
Could the hon. Gentleman tell us whether he has any hope at all of increased supplies? I take his speech to be most pessimistic.
§ Mr. Stewart
I may be mistaken, but I do not think the hon. and gallant Gentleman had returned to the Chamber when I was beginning my speech. I mentioned then that there was some action about supplies in the international field that could be taken, and we were taking whatever action was useful at the present time. I could not possibly suggest, nor can anybody else, that increases in supplies could be obtained in any way commensurate with the increases in demand.
§ 9.36 p.m.
§ Mr. R. S. Hudson (Southport)
We have had a very interesting couple of hours' debate on this matter, and my hon. and gallant Friend the Member for Pudsey (Colonel Banks) is, as the Parliamentary Secretary said, to be congratulated on having raised this question, because it illustrates in a particularly acute form the sort of problems we are bound to be up against over the next few years, and at the same time it illustrates many of the methods which ought not to be followed in dealing with this question. I assume that it will be the new Minister of Materials who will be dealing with nickel in the future, and that it will not be a matter any longer for the Minstry of Supply. I hope that the Lord Privy Seal will read this debate and will take note of some of the mistakes which ought to be avoided.
Before I concentrate on the speech of the Parliamentary Secretary to the Ministry of Supply, I should like to say a word about the speech of the hon. Member for Bilston (Mr. Nally). He said that undoubtedly it would have helped manufacturers in this country—and incidentally the men employed by them—if they had been given more time. He went on to say that they might have been given more time.
§ Mr. Nally
The right hon. Gentleman would not wish to misinterpret what I say. I certainly did say it would have been a great convenience for the manufacturer if more time had been given, but 2445 I may not have made myself altogether clear. The whole trend of my remarks was to the effect that this situation was an urgent one, especially in the matter of nickel supplies, and that the Government had to act urgently. Therefore, the Order was perfectly justified.
§ Mr. Hudson
The words I took down were "might have been given more time" and I assumed from that that the hon. Member meant the manufacturers might have been given more time; but I will not quarrel with the wording.
The fact of the matter is that the re-armament programme dates back to August of last year, and anyone who has any knowledge of the requirements of the re-armament programme must have known that it would require increased supplies of nickel to develop that re-armament. Everybody knew from the statistical position in Canada and elsewhere that supplies of nickel were definitely limited, and that we had exhausted it during the late war in areas where we could get it easily by opencast methods. Everybody might have known that the problem of increasing supplies of nickel was bound to be very difficult, even if it were obtainable at all. The gravamen of the charge against the Government is that they have brought forward this Order too late.
§ Mr. Hudson
The Americans introduced a nickel restriction as long ago as last February. It surely would have been within the capacity of this Government of planners—who, I would remind the hon. Gentleman, said, through the mouth of the Foreign Secretary, they were not going to be the victims of blind economic forces any more because they planned—to have seen that if the Americans needed to restrict nickel as long ago as February, it was time that we did something about it, too.
We were told in the resignation speech of the former President of the Board of Trade that one of the criticisms from the United States of America was that we were not doing as much in the restriction of supplies as they were. It would have been better to bring in some restriction in the use of nickel earlier this year. Then we should not now be exposed to the shortage and would have given manu- 2446 facturers the longer notice of which the hon. Member for Bilston so rightly spoke. That observation applies equally to the remark made by the Parliamentary Secretary tonight. He gave us the excuse that the Government could not possibly hope to match the increase in the demand with an increase in the supply. I agree with that, but we could legitimately hope that the increase in the demand would have been foreseen and steps taken to adjust consumption to supplies that were likely to be forthcoming. The difficulty in which we are today has been caused by that action being taken too late.
The hon. Gentleman also talked about consultations with industry. One of the practical difficulties and the anomalies about which we have been hearing is illustrated by the point that we have made more than once from this side of the House. Indeed, I mentioned it in two recent debates. It is that the Departments are not consulting industry in as detailed a manner as they ought to. The Lord Privy Seal spoke last week in this House and tried to make the House believe that industry had been consulted in these matters. In fact, we now know that the Federation of British Industries have definitely stated that they did not agree to the method but they had been presented with a fait accompli.
A great deal of these troubles would be avoided if the advisory committees were made more use of and not regarded, as so many are at present, merely a sop to the industrialists. It is all very well for the Parliamentary Secretary to talk about having consulted most trades about the difference in functional use. He mentioned handlebars as an illustration. What is the functional difference between the rim of a motor-bicycle and the rim of an ordinary bicycle which justifies one being nickel-plated and the other not? Is there any functional difference at all?
It is clear that the industry could not have been consulted about these matters or there would not be such ridiculous anomalies. What is the functional difference between a hub-cap, which can be nickel-plated, and a rear lamp, which cannot? It is not good enough for the Parliamentary Secretary to make excuses of that kind, and I hope that in future the Department will take more detailed steps to see that industries are given adequate time to make their comments.
2447 As regard consultations with O.E.E.C., both sides of the House will agree that they are desirable and will welcome them. I am sure that both sides of the House will equally welcome the promise made by the Parliamentary Secretary regarding steps to be taken by his Department to see that, as far as possible, questions of personal hardship shall be resolved. It is clear that, with the re-armament programme, we cannot avoid some hardship to firms, but I am glad to hear that he apparently realises the importance of reducing interruption and hardship to the minimum. As a result of that promise, my hon. and gallant Friend will probably see fit to withdraw the Motion.
§ 9.45 p.m.
§ Colonel Banks
Before I participated in the debate, I took the precaution of passing to the Minister of Supply the main headings of everything I should have to say. During the time when I was preparing the material for my speech, I was careful, as far as it is possible for anybody to be careful, to be constructive and to be helpful about the use of nickel in the future. I did not simply say, "We want more than we have"; I simply said, "Let us try to do it the right way."
I am bitterly disappointed that after 1 have laboured so hard to give a number of constructive suggestions, all I have heard from the Dispatch Box has been a lot of whitewash which does not register with those in industry. [HON. MEMBERS: "Oh!"] I feel that that is true and that we have just had something to fob us off again. That is a very wrong thing to do and it is not calculated to get the best out of hon. Members on this side of the House and to gain their co-operation in conserving a metal which is in short supply.
Having had the Government's explanation, I merely want to ask the Parliamentary Secretary if it is possible to achieve this. While a manufacturer in this country has prefabricated parts or parts which are cut to size or to a shape for a certain job in a certain industry, will the Ministry undertake to grant licences so that all those parts may be used up? Will the hon. Gentleman give that undertaking?
§ Mr. M. Stewart
By leave of the House. I should like to comment on some 2448 of the points raised by the hon. and gallant Gentleman the Member for Pudsey (Colonel Banks). I have indicated the very careful efforts that will be made by the Government to deal with some of the difficulties he raised, and if after that his comment is that it is merely whitewash, I do not understand why he should now make a further request. If he will reflect on what I said earlier, he will recognise that I endeavoured, so far as possible within the limits of the problem, to meet some of the difficulties he raised, and I do not think he has yet given proper consideration to that.
We have already foreseen that manufacturers may be in the position which he has described, and that is one of the grounds on which licences will be granted. The hon. and gallant Gentleman will appreciate that we are not saying that every manufacturer who comes forward and claims that certain things apply to him will get a licence merely for the asking; we begin by saying that there are certain classes of grounds and reasons in respect of which licences shall be granted. The ground he has described would be one of them.
§ Colonel Banks
In view of the hon. Gentleman's explanation, I beg to ask leave to withdraw the Motion.
§ Motion, by leave, withdrawn.