HC Deb 28 June 1951 vol 489 cc1577-82

The following Question stood upon the Order Paper:

67. Mr. DRIBERG,

—TO ask the Chancellor of the Exchequer whether he will make a statement on the steps being taken by His Majesty's Government to control the distribution of scarce metals, with particular reference to the defence programme and important civil needs.

The Chancellor of the Exchequer (Mr. Gaitskell)

With your permission, Mr. Speaker, I should like to answer Question No. 67.

Mr. Churchill

On a point of order. If Questions are to be selected which have not been reached in the ordinary course might not some consideration be given to Question No. 45, addressed to the Prime Minister?

[Mr. HOLLIS,—To ask the Prime Minister, whether the speech of the Minister of Supply at Margate on 21st June, to the effect that drastic action would be taken against the Iron and Steel Federation if the Federation refused to the Iron and Steel Corporation effective control of purchase of iron ore abroad, represented the policy of the Government.]

Mr. Speaker

No. hon. Gentleman or right hon. Gentleman has a right to ask that any Question should be answered. The initiative comes entirely from the Minister, who asks my permission. That is the only initiative which can be taken.

Mr. Churchill

May I ask whether the Prime Minister will not take the initiative in answering Question No. 45?

Mr. Speaker

That would not be the Prime Minister taking the initiative. In that case, the initiative would have come from the other side.

Mr. Gaitskell

The answer to Question No. 67 is as follows: Yes, Sir. The Government have been considering whether further steps are necessary to ensure that the distribution of steel and of non-ferrous metals is carried out in accordance with national requirements.

In the case of steel, though production is not likely to be seriously below last year's record level, demand is rising. This year's total requirements, including those of defence, are likely to exceed available supplies. The extent of the gap will vary according to the type of steel, and is not likely to exceed 10 per cent. on the average. But if defence requirements and those of the most important civilian users are to be met in full the shortage will be somewhat greater for other users. Sheet steel and tinplate are already subject to allocation; in the circumstances the Government have decided that full allocation schemes must now be prepared for all other types of steel.

As regards non-ferrous metals, there is, as the House knows, a serious shortage of copper and zinc. The use of these metals and their alloys for inessential purposes was prohibited some months ago and an informal control over distribution established. The Government have now decided that in the case of copper, zinc and their alloys, arrangements for the closer control of distribution are also necessary and should be prepared.

Although a good deal of work has already been done on the planning of these allocation schemes, it will be some time before they can come into full and effective operation. Meanwhile, it is necessary to ensure that vital defence orders and the most essential civilian and export production should not be held up for lack of materials. This will be done by the use of a symbol to be applied to special defence orders so that they may be identified and given appropriate priority by the suppliers of materials.

Somewhat similar arrangements will be made for the most important civilian orders; the sponsoring Departments will be able to claim, in a strictly limited number of cases, preferential treatment by applying a symbol to the order so that difficulties caused by a lack of comparatively small quantities of these raw materials can be quickly overcome. I must emphasise that these schemes for safeguarding the most important civilian production can be operated successfully only if the special assistance to be provided under them is restricted to a limited number of orders.

I am circulating in the OFFICIAL REPORT a fuller statement giving more of the technical details involved in these arrangements.

Mr. Driberg

Can my right hon. Friend say whether, under the interim arrangements which he has just announced, some of the smaller firms engaged in important export work, which are now having very great difficulty in getting the steel they need, will be able to get that steel almost immediately?

Mr. Gaitskell

If they can make out a sufficiently strong case to the sponsoring Department.

Mr. Edelman

Will my right hon. Friend say what action he will take, pending the introduction of the allocation scheme, to prevent hoarding? Secondly, has he already made contracts for imported ores for 1952 in order to maintain full production, and did he have the full co-operation of the Iron and Steel Federation in that matter?

Mr. Gaitskell

So far as the first supplementary question is concerned, the arrangements for allocations will, of course, take into account the stocks of the firms concerned and there should not, therefore, be the same incentive to hoard now that we have announced that allocation schemes will be brought into operation. My hon. Friend's second supplementary question is a very much wider one and I do not think I can very well answer it arising out of this Question.

Mr. R. S. Hudson

May we assume that this scheme will be worked out with the fullest consultation, in the real sense of the word, with industry and that industry will not be presented with a fait accompli and asked to comment.

Mr. Gaitskell

Yes, certainly; and I may say that industry was consulted before this statement was made.

Mrs. Jean Mann

Is my right hon. Friend aware that the Coatbridge Tin Plate Company are closing down next week: that they have received no allocation whatever; and that there is a prospect that 200 men will be unemployed? As I have already sent particulars to the Ministry of Supply, will he look into the case of this firm?

Mr. Gaitskell

My hon. Friend was quite right to send those particulars to my right hon. Friend and I have no doubt that he will look into the matter.

Mr. David Eccles

Is the Chancellor of the Exchequer satisfied that when putting in their requirements for various weapons the Service Departments are not asking for too much steel? Will he not consider the experience of the war when the Minister of Production did very useful work in paring those requirements? Is the Minister of Materials to have any such power?

Mr. Gaitskell

It will not be for my right hon. Friend the Minister of Materials, I think, because the responsibility for steel rests upon the Minister of Supply.

Mr. Eccles

But the Minister of Supply is responsible for the supply of steel, is he not?

Mr. Gaitskell

Yes. To a certain extent the Allocation Committee screens all these requirements, of course.

Following is the statement:

The Government have decided on three measures to control the use of scarce metals.

First, allocation schemes are being prepared for iron and steel (other than sheet steel and tinplate which are already subject to allocation) for introduction as soon as possible and corresponding measures to regulate the distribution of the more important of the scarce non-ferrous metals will also be worked out.

Secondly, since it will take some time to get these schemes introduced and working effectively, the following interim measures will be brought into operation so as to safeguard the defence programme meanwhile. These are:

  1. (a) A "Defence Order" symbol which can be applied, by Government decision, to orders for specialised defence equipment or work. The contracts to which this symbol is applied will be distinguished by the letters D.O., the quotation of which, with the contract number, will entitle the contractor or sub-contractor to get steel (including alloy-steel, but excluding sheet steel and tinplate which are already allocated) and certain nonferrous metals, which at this stage will be limited to copper, zinc and their alloys. Contractors will be notified in writing of contracts to which the D.O. rating will apply and will be asked to pass on to their subcontractors and component suppliers the appropriate contract numbers and D.O. symbols which should be used to identify these orders to the materials supplier.
  2. (b) So that demands supported by a D.O. symbol are not unduly concentrated on particular suppliers, the Minister of Supply proposes to arrange, through his Steel Rearmament Panel and the Non-Ferrous Metals Federation, for suppliers to set aside a proportion of their output for these special orders. This proportion will not in general be large, except in the case of alloy-steels, and the consequent reduction in supplies for other purposes should be distributed fairly among all customers (including those who have D.O. contracts), in the light of the importance of the civil work which they are doing.

Thirdly, not only the defence programme, but various categories of civilian production must be safeguarded while the allocation schemes are being worked out. These categories include dollar and sterling area exports and the fuel and power programmes, which remain as important as ever they were. Proposals are, therefore, being worked out whereby sponsoring Departments will be able to claim preferential treatment for specific orders for goods for which iron, steel (other than those already allocated) and copper, zinc and their alloys are required, subject to a strict limit on the amount qualifying for such preferential treatment in any particular period. This scheme, for which a special symbol, "P.T." indicating "Preferential Treatment," will also be used, will enable Departments to deal with particularly difficult obstacles to important production caused by lack of comparatively small amounts of raw material.

Finally, it must be emphasised that the interim measures for civilian production are intended to apply only to a small number of cases of particular importance or difficulty. Over the rest of the wide field of metal-using industries the Government must meanwhile continue to look to industry—both manufacturers and material suppliers—to do their best to make sufficient material available for those purposes which in the light of the general guidance given by the Government are known to be important. In cases of special difficulty or of doubt about the degree of importance of an order, reference could be made to the production Department.