Tin Purchase

HC Deb 21 February 1952 vol 496 cc539-56

Motion made, and Question proposed, That a sum, not exceeding £4,092,500, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1952, for expenditure of the Ministry of Materials for the purchase, storage and handling of tin for sale to the Government of the United States of America.

9.10 p.m.

Mr. Hopkinson

The need for this Estimate arises out of the agreement concluded by my right hon. Friend the Prime Minister on his recent visit to the United States in regard to steel and other raw materials, which was published as a White Paper, Command 8464.

Briefly the position was that we needed steel and iron ore. The United States wanted aluminium and tin. Under the agreement the United States Government undertook to supply to the United Kingdom in 1952 1,400,000 short tons of steel or its equivalent in ore, scrap and pig iron. We get this steel at the American controlled prices; that is, the prices of different types of steel to the American home consumer, as opposed to the far higher prices for American export steel. From the point of view both of re-armament and of our export trade this is of the highest possible importance.

In return, Her Majesty's Government undertake first to make a loan to the United States Government of 15,000 metric tons of aluminium in addition to the original loan of 10,000 metric tons which formed the subject of a previous agreement in November last.

Mr. H. Hynd

Is this the first loan we have made to the United States of America?

Mr. Hopkinson

As regards tin, Her Majesty's Government undertake to deliver to the United States Government 20,000 long tons of tin between the date of the signature of the agreement and the end of the year. As hon. Members will be aware, tin has been a thorny subject between ourselves and the United States for nearly a year. A great many accusations were made in the United States about the price and the output arrangements in regard to Malayan tin which were in my view wholly unjustified. However, bitterness and suspicion certainly existed in America and led to a series of developments which have been equally damaging to the United States and Great Britain. On the one hand, the United States went out of the market for tin metal and one of the most important dollar earning industries of the sterling area ceased to earn dollars and has earned none since.

On the other hand, the United States became increasingly short of tin, a shortage which by the end of the year had become acute. In passing, I would mention that a goodwill mission, which the Malayan Government invited the United States Government to send to Malaya, spent two or three weeks there early in November seeing at first hand the operations of producing and marketing tin. The idea that producers were restricting output was entirely dispelled, and tributes were paid by the American team to the way in which Malayan producers were maintaining production in spite of their great difficulties, including of course guerilla activities. But the visit of the mission did not bring the United States any nearer to the resumption of tin buying.

It was quite obvious that it was in the interests of everybody to find a way out of this impasse. This was achieved by the Agreement concluded by my right hon. Friend. Not only have we acquired a great addition to the supplies of steel which we so badly need, but we have opened up the path to a return to normal American buying of Malayan tin.

9.15 p.m.

In order that the Committee may understand the need for the additional expenditure contemplated in the Supplementary Estimate, perhaps I may be allowed very briefly to describe the main features of the section of the Agreement on tin. Tin amounting, as I have said, to 20,000 long tons will be bought by the United States at one dollar 18 cents a lb., which is the equivalent of £944 a ton.

Mr. H. Hynd

How does that compare with the current market price?

Mr. Hopkinson

The current market price per ton in Malaya is £963, and in London, £982. The Agreement provides that if we deliver any tin other than Straits quality, there shall be a discount, which amounts to about 1 cent a lb. For tin of that quality, therefore, we should get £936 a ton.

Mr. Arthur Colegate (Burton)

Is £936 the figure for long tons?

Mr. Hopkinson

Yes, long tons.

Mr. Colegate

Is my hon. Friend speaking of long tons throughout?

Mr. Hopkinson

Yes.

We are limited by the Agreement to deliver a maximum of 5,000 tons of tin other than Straits quality. We shall, of course, be paid in dollars, and the minimum that we shall get out of this transaction is 52 million dollars. There is, however, a most favoured nation clause, under which, if during the period of the agreement the United States pays a higher price for tin to any other suppliers elsewhere, such as Bolivia or Indonesia, the balance of the tin which we are to deliver will be paid for at that higher price.

There is also a clause which precludes the United States, either directly or indirectly, from competing with us in the Malayan markets without our knowledge and so forcing up prices unnecessarily. If tin of Malayan origin is purchased by the United States through suppliers other than Her Majesty's Government, the most favoured nation clause again applies. In addition there is provision for a contribution towards any possible losses if the United States buys Malayan tin through a third party at less than one dollar, 18 cents a lb.

Under the Agreement, the 20,000 tons of tin are to be delivered to the United States in roughly equal quarterly instalments. This means that 5,000 tons must be delivered before the end of March. As these transactions will take place partly in this financial year and partly in 1952–53, we have to submit a Supplementary Estimate and an Estimate for next year. It has not been possible to calculate exactly how much tin will actually have been delivered and paid for before 31st March, but we have assumed that it will amount to 4,000 tons. There will, however, also be tin which has been delivered and not yet paid for by the United States or tin which is in transit. All this, however, will have had to be paid for already by Her Majesty's Government.

That accounts for the difference between the provision in the Estimate for £7,800,000 for purchases and storage of tin and £3,700,000 for receipts from the United States. It is not any indication of expected loss, and subsequent substantial further receipts for tin bought and paid for by the Ministry during the current year will be allowed for in next year's Estimate, which will cover the remainder of the transaction.

It is impossible to say at present what the final outcome of the tin transaction will be in terms of cash. The Committee will not expect me to go into details of the methods we are using, and shall use, to obtain tin which we have undertaken to sell to the United States. I can assure hon. Members that the Ministry will exercise all due prudence in their buying and will act on the best advice they can obtain so as to mitigate the effect of our operations on prices.

In the end there may be a cash loss on the sale of tin, but this must not be taken for granted. In the opinion of the Government it would be far more than compensated by the arrangements my right hon. Friend was able to make for the supply of steel. There is also the fact that we have ensured an immediate flow of dollars for a commodity which is vitally important to the dollar balances of the sterling area but which has not been earning dollars since the United States went out of the Malayan tin market.

Finally, the removal of the Anglo-American friction which prevailed on the sale of tin is a further justification. I feel the Committee will agree that these three factors, taken together, will more than compensate for any cash loss which may be sustained in the end.

Mr. G. R. Strauss

This Supplementary Estimate, as has been stated by the Minister, and as is stated in the document, arises from the Agreement with the United States Government dated 18th January. As the policy underlying the Agreement has never been discussed by the House and is therefore new, I take it that we have greater latitude in discussing this Supplementary Estimate than the others with which we have been dealing.

Of course we on this side of the Committee are delighted that this Agreement was arrived at with the United States. It will bring very substantial benefit to this country and we are glad that the negotiations which were opened by the previous Government, by my right hon. Friend who was then Chancellor of the Exchequer when he discussed in broad outline some such exchange of materials, later fructified into this Agreement.

There are two comments I wish to make before discussing the matter in detail and before considering to what extent there are bad aspects of this Agreement. First, I make the general political comment that it is interesting to see that the present Government, so far from doing away with the bulk purchasing arrangements made by the Labour Government, are not only accepting all those of the previous Government but extending the system of bulk purchase, as in this proposal. Here is an arrangement for bulk exchange of substantial quantities of metal. It is an innovation, a welcome one, and makes nonsense of all the declarations of the Conservative Party that they were against bulk purchase.

The second point, which I hope the Government will acknowledge, is that this Agreement was only made possible by the foresight of the previous Government in buying very substantial quantities of aluminium from Canada. We did that when there was some question as to whether we really ought to do it. It involved us in considerable dollar expenditure. This was last year and the dollar situation was even then not too rosy, but we made up our minds that it was in the interests of the country and of the sterling area as a whole that we should buy very much greater quantities than we had originally bargained for in order to secure the aluminium supplies we required for ourselves and, maybe, for our friends. It is that additional amount of aluminium we now possess which has made the Agreement possible. The United States authorities were so desperately short of aluminium that it may be without our aluminium to bargain with, this Agreement could not have been concluded.

We are told in the White Paper that we are to get the steel to which we are entitled—135,000 tons in the first quarter and 250,000 tons in the second quarter. I should like to know whether we have received or are likely to receive that full amount in the first quarter and whether, as far as we can tell, the 250,000 tons will come in the second quarter.

It would have been much better for us, naturally, if we had received higher quantities in the first and second quarters. It would have evened out the supply during the year as we are evening out the delivery of tin and aluminium to the United States. One might think that the American authorities might have gone out of their way, even at some inconvenience to themselves, and delivered us substantial quantities in the first and second quarters of this year. I presume that every pressure was put on the American authorities to do that, and that the Government were unsuccessful. I regret it because it would have made the Agreement much more attractive and beneficial if this had been possible.

There are two features of the tin purchases by the American Government which appear to me to be curious, and, in a way, objectionable. The first question one is bound to ask is this. The American authorities want tin, but we do not produce tin in this country, or at any rate hardly any. They want 20,000 tons. Why then do they ask us to buy this tin for them from another country—true it is a British Colony, but whose economy we do not fully control—when they could perfectly well go to that colony or anywhere else and buy the metal themselves? Why should we be asked to buy this tin for them?

That is a peculiar provision and arises, maybe, out of the bad blood which has existed between Malaya and the United States on this tin question in the past and is a continuation—I hope it will not continue any longer—of the suspicion—in my view wholly unfounded—with which the American authorities have regarded the tin market and the extraordinary suspicion which they cast on this free market, as it is, even though the Americans like free markets. They have been very suspicious in the past, and presumably it is for that reason that they ask us to buy this metal for them when obviously they could have bought it just as well themselves.

The second point is that we are selling the tin to them at a fixed price—£944 a ton. We are having the steel from the United States at a price which may vary considerably during the year. It is true that it is called a controlled price. It is the internal price and not the export price, but that controlled price might presumably increase substantially during the year. There are rumours that the price of iron and steel is going to be put up in this country. It may be put up in the United States.

Therefore, we are in the really ridiculous and unfair situation that we have undertaken to sell to the United States substantial quantities of tin at a price below the current market price, whereas we are going to buy from the United States steel at whatever the controlled price may be in that country. If costs go up there, then the price of steel goes up. That seems to me to be a most unfair situation and to be deprecated. It may possibly involve the Government in very substantial losses.

Tin is a volatile metal. The price may go up substantially during the year if a big world demand for it develops. It is a free market and the price may go up £100 or £200 a ton, in which case the Government are bound to stand the loss, and not the individual producers. There is no suggestion that the producers should be asked to accept £944 a ton.

My own view is that that is a fair price in a sense; it well covers production costs of most producers in Malaya. But if the price goes up substantially, the British Government, and not the producers in Malaya or the Malayan Government, will have to stand the loss, sell the tin to the United States on the basis of £944 a ton, and, may be, pay the producers a very much larger price. If that happens— hope it will not—it would be a ridiculous state of affairs and would show that this Agreement, welcome as it is as a whole, particularly in view of the substantial quantities of steel which it is going to bring to us, contains unfair conditions, too, which we very much regret.

I should like very much to know—and I think the Government ought to tell us —whether they agreed to these obviously unreasonable and unfair conditions willingly because they thought them right or because they were really forced to do so in order to make a bargain at all. If they did it because they thought it right and desirable then we shall attack them very seriously, but if they did it, as I suspect they did, because the American authorities insisted that this was a condition of making an agreement, let us know and we shall know where we are and where to direct our criticisms.

9.30 p.m.

The policy of the United States authorities on tin has been exceptional. In respect of almost every other commodity their attitude has been fair, reasonable, co-operative and even generous. Apart from difficulties caused to our economy and the economy of the world by their stock-piling on much too heavy a scale in the early days, since my right hon. Friend the Leader of the Opposition went to the United States to discuss the matter with the American authorities they have been very anxious and willing and fair in making agreements to divide scarce materials.

But tin has throughout been an exception. Their policy has been so ridiculous as to succeed at the same time in doing substantial damage to the economy of both the United States and the rest of the world, and particularly of the sterling area. Last year the United States bought practically no tin at all. The year before they bought a little over 40,000 tons. The difference between 40,000 tons and practically none at all is, in money, something like £40 million.

America bought £40 million worth less tin last year than they did in the year before. That decision made a significant contribution to bringing about the present economic crisis of the sterling area. At the same time the American economy was starved of tin and tin consumers in the United States were screaming for more. They had to curtail their manufacture, and they criticised very severely and, in the end, successfully the American authorities for this policy. American policy in this matter has plainly been most unwise and indeed damaging.

I hope this Agreement shows a change of heart and mind and that in future the American authorities will consider the tin problem which closely affects this country and our balance of payments problem not in the prejudiced way in which they have done in the last few years but reasonably and logically, and that we may get closer together. For that reason and because we believe it will open the path for better agreement in the future with regard to tin, and even more because of the substantial amount of steel it is going to bring us late in the year—which we would rather have had earlier in the year—we welcome this agreement as a whole and we willingly endorse the Supplementary Estimate before the Committee. But we hope we shall have a further explanation from the Government, particularly of the matters I have raised in the comments I have just made.

Mr. Colegate

I must confess I was a little confused by the speech of the right hon. Gentleman the Member for Lambeth, Vauxhall (Mr. G. R. Strauss). First, we were told that America was very generous and then we were treated to the usual Labour Party charges against and suspicions of America. Later still we were told that bulk purchase was a wonderful thing and that there had been an agreement on bulk purchase, a method of purchase which this side of the Committee criticised when in opposition. We were told that by the right hon. Gentleman, but in the latter part of his speech he said what a dreadful thing it was for the American economy that the United States Government made a bulk purchase of tin. [HON. MEMBERS: "Nonsense.] The right hon. Gentleman said that the year before last the United States made bulk purchases of tin of 40,000 tons.

The Chairman

We are not discussing bulk purchase as such. We are discussing a Supplementary Estimate.

Mr. Colegate

I want to try to be well within the limits of order, but the right hon. Gentleman gave us that figure concerning the bulk purchase of tin by the United States and the chaos it caused in American industry. Am I not allowed to follow the right hon. Gentleman?

The Chairman

No. I think my predecessor in the Chair must have been kinder than I am.

Mr. Colegate

I must limit my remarks, but it is clear that this agreement is an extremely satisfactory one. This purchase of tin was welcomed, with all its possible disadvantages, because the main point of this agreement is surely that it was come to in order to get what is much more valuable, namely, one million tons of steel.

The Chairman

I should like to apologise to the hon. Gentleman. I did not know this was a new Estimate; I thought it was a Supplementary Estimate. I am sorry.

Mr. Colegate

Thank you, Sir Charles. I am glad of the latitude you give me. I should like to enlarge a little about the inconsistencies to which we are constantly treated from the other side in regard to the virtues or the defects of bulk purchases. In effect, what the right hon. Gentleman said was that whereas it was a virtue for the late Government to indulge in bulk purchase, the moment the United States Government indulged in bulk purchase it was a very bad thing and created great chaos in America.

Mr. G. R. Strauss

indicated dissent.

Mr. Colegate

It is no good the right hon. Gentleman shaking his head.

Mr. Strauss

If it is no good shaking my head, perhaps I had better get up. I said nothing remotely resembling what the hon. Gentleman said. If he reads tomorrow's HANSARD, he will see what I said.

Mr. Colegate

I took down the words of the right hon. Gentleman. He said that the United States purchases of tin the year before last were 40,000 tons—let him correct me if I am wrong—and that in the following year they purchased no tin whatever. Am I right so far?

Mr. Strauss

Yes.

Mr. Colegate

Very well. The right hon. Member then said that this was to the great detriment of the United States industry. Am I right?

Mr. Strauss

Yes.

Mr. Colegate

Very well. Therefore, his bulk purchase argument failed. [Interruption.] The right hon. Gentleman must make up his mind whether or not he likes bulk purchase. He must not constantly give the argument one way and turn round a few minutes later and give a totally opposite view of the situation.

Dr. Stross

I think the Committee have a right to ask the hon. Member this question. If 40,000 tons were purchased in one year and no tons were purchased in the next year, how much bulk purchase does no tons of tin represent?

Mr. Colegate

The hon. Gentleman is so concerned with mathematics and yet he does not know that there are such things as zero quantities and negative quantities. The positive quantity of bulk purchase of tin was 40,000 tons in one year. What we want to know is what we get in return. I think the Committee would like to know what we mean by one million tons of steel. We are entitled to a little more information on the subject.

Does it mean that we are to get one million tons of steel billets or mild steel or high tensile steel wire—which is one of the shortages in industry today? Does it mean sheets, plates, ship plates? What does it mean? We are entitled to know a little more clearly what is meant by one million tons of steel. It will mean a very great deal to the ship building industry, to the engineering industry and to others if we get the categories of steel which we require and not merely one million tons of mild steel.

I do not know how much information is in the possession of the Minister, but we should be glad to know what information he has. In any event, there is no doubt that it has been well worth while to make the transaction, even with the limitations given by the right hon. Member for Vauxhall, with his great family knowledge of the metal trading market. It seems to me that it is a highly advantageous agreement to British industry to have this one million tons of steel.

No arguments as to whether bulk purchase is good or bad can be drawn from a single agreement of this kind, which must have been largely conditioned by the fact that as a result of the actions, or rather the mismanagement, of the late Government we were short of the necessary dollars to operate open-market transactions.

Mr. Wilfred Fienburgh (Islington, North)

We have been invited by the hon. Member for Burton (Mr. Colegate) to clear up our internal contradictions on these benches about bulk purchase. I was relieved, Sir Charles, that you changed your mind in your Ruling about this, because during the day I have been to some trouble to find out some of the consistencies and inconsistencies over bulk purchase which seem to afflict so horribly the present Members of the Government.

I agree with my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss) that this is a very welcome agreement, bringing to this country a considerable amount of very welcome steel. It is, however, one of the biggest interventions of a Government in what hon. Gentlemen then in opposition would have described as the normal rôle of the private trader, which has ever happened in the history of this country. It is a revolutionary process on which we congratulate them very sincerely indeed, but in attempting today, before the debate, to find out what processes of thought and reasoning and argument have been going on in the Conservative Party to change their attitude upon bulk purchase, I went round to the Conservative political centre.

Mr. Hobson

Shame.

Mr. Fienburgh

It is fair enough, for if people come to Transport House they got a logical answer, and I thought that if I went to the Conservative political centre I should get a logical answer. [HON. MEMBERS: "No"] I remembered the general approach to bulk purchase and to State trading which was manifested by hon. Members opposite during the election campaign and for several years before it. They converted bulk purchase, which in its essence is a fairly relevant but not huge medium of conducting economic exchange, into a major principle of politics. They blamed upon bulk purchase all the increases in prices, all the increases in costs which have been inflicted upon this country. They blamed the civil servants who were operating the bulk purchase agreements and insulted the business men employed by the Ministries to put the agreements through. Now they show a complete and utter reformation of character.

9.45 p.m.

I therefore went to the Conservative political centre to see what had been happening. I was met there by a very charming, typical young Conservative girl —typical because she was charming—charming but vague. I asked her to look around for current publications of the Conservative Party on bulk purchase. But the shelves had been wiped clean. There was nothing to be seen at all. I wondered why. After all, when the leaders of certain totalitarian States alter their minds on issues of policy, all the history books disappear and the propaganda sheets disappear because they retrospectively have got to be rewritten to add up to the current policy being adumbrated.

I had a wonderful vision of the research workers of the Conservative Party re-writing—I see you are about to stop me, Sir Charles. I am sorry if I have overstepped the bounds of order. It is very hard for a new Member. I may he allowed just one or two slight verges over the border. [HON. MEMBERS: "No."] I should not be surprised if I over-stepped the bounds of order, because having seen the hon. Member for Croydon, East (Sir H. Williams) ruled out of order today, I have seen everything in this Chamber.

After some trouble—and I come now to the real point of the matter—after some considerable amount of digging into the files, a very interesting booklet was produced that was published by the Conservative Party, entitled, "The State as a Merchant." The peroration to this book was a quotation of a peroration by the Prime Minister. The right hon. Gentleman is at his best in his perorations. I was very interested to hear that he personally had negotiated this particular agreement, because until now the actual negotiation and who negotiated it has been a matter of mystery. The right hon. Gentleman in this quotation said: The method of large scale State buying of food and raw materials which, in so many instances, has led to grievous issue, must be closely reviewed, searchingly scrutinised, and due recourse must be had once again to the flexible channels of normal trade processes, upon which our crowded population had reached before the war a higher standard than existed anywhere in Europe. [HON. MEMBERS: "Hear, hear."]

I am very glad to hear that cheering by hon. Gentlemen opposite of that remark, because it was precisely that which the late Government did in respect of this particular market. They did restore this market; they did restore this commodity to flexible channels and normal trade processes. The Prime Minister, however, goes to Washington, tears up his peroration, ignores his principles, and agrees to a bargain based upon a system which he previously impugned, and then has the impudence to come back and claim that as a personal triumph. It is the very first time we have seen such a rapid refutation of principle regarded as a triumph.

I am just dealing, on this Vote, with the method by which the agreement was reached that leads to the need for this particular Supplementary Estimate. I am interested, too, to see that in this respect this particular agreement for which we are being asked to provide the funds is an instance of trading relations being entered into as an instrument of foreign affairs, because it is being said that one of the most vital points about this agreement is that it does sweeten the diplomatic channels between this country and the United States of America. I really must warn the Foreign Secretary about the viper he is nursing in the Foreign Office in regard to this issue of state trading. I looked up today the remarks made by the Minister of State who, on 12th May, 1950, said: What I object to more than anything else"— more than to Stalin, more than to unemployment, more than to anything else— is the handling of the trade operations of the nation by Government Departments."—[OFFICIAL REPORT, 12th May, 1950; Vol. 475, c. 766.] Now we have the trading relations of the nation handled by the one-man Government Department represented by the Prime Minister. I must say that it is in no spirit of animosity that I bring forward this remark made by the Minister of State. It is incidental to my point that he was my brigadier during the war, when I was a mere major on his staff. On the whole, he was a very good one indeed, and I very seldom had reason to complain of him at all.

But was this a good agreement? We have already had expounded to us by my right hon. Friend some of the very grave defects of this agreement. It might have been better if the Conservatives had sent a real business man to conduct these negotiations. I quote now from the "Daily Telegraph." I prefer to quote from the "Daily Telegraph"; it is so much safer, because I cannot be accused of partisanship, as I might be if I were to quote from the "Daily Herald." The "Daily Telegraph" of 19th January said: We undertake a certain risk of having to pay something more than £944 a ton for the tin. That risk has already been faced. It has happened. We are now having to pay more than £944 a ton for that tin. Where is this tin to come from? That has not yet been made absolutely clear. Some of the tin may come from stocks, in which case we are once again dissipating our stockpile in this country, or wherever we may hold it. Some, and the bulk, of it will certainly have to be bought in open market operations, with no coverage against loss.

Now, I know that there is a most-favoured-nation clause written into the agreement; the agreement as I understand it, lays down that if the United States buying in the open market buys at more than 1 dollar 18 cents per lb., then a compensatory adjustment will be made for us. Similarly, if they are able to buy at less than that sum there will be compensation as far as we are concerned.

What has the United States done since this agreement was made? It has used the pressure of this agreement upon the South American tin producers to insist upon agreements at 1 dollar 18 cents per ton. That has been happening since we made the agreement, so they are covered; they are paying a price which does not mean that they have to pay a compensatory adjustment to Great Britain. But we are still having to operate in the open market, and still having to buy our tin, and will have to buy our tin, at prices in excess of the £944 per ton which we are receiving from the United States.

Why has this situation arisen? Why is the United States so avid for tin? It is only a very short time ago that they were insisting on staying out of the market until they had beaten the price down to £800 per ton; that was the price at which they said they would come into the market again. They have not succeeded in beating the price down so far. They have not succeeded because of the internal pressure of their own tin users. Therefore, I repeat the point made by my right hon. Friend; they had to have tin. Why should they not go on the open market for that tin, direct to the Malayan producers of tin? Why should the British Government be brought into this issue as tin brokers—as brokers operating as no successful businessman would? The party opposite is the party of businessmen. Why should they operate as brokers at a consistent, steady and inevitable loss all along the line?

Finally, I should like just to touch on the question of the steel we are to get in return. Again I quote from the "Daily Telegraph," so that I shall not be accused of being partisan in my selection of quotations. All my quotations tonight have come from the other side. One of the useful things about the Conservative Party is that they say so much that one can pick them up on practically any issue at some time or another.

On the same date, 19th January, the "Daily Telegraph" said that the price at which a million tons of steel have been bought is not yet disclosed, but it is understood to be higher than has been paid recently, and that an increase of between £1 and £1 10s. per ton in the selling price of steel in this country is considered possible. There we have the circumstances of the bargain in this case: we are selling at a loss which will be a charge on the taxpayer, and we are buying in such a way as will impose extra cost on the consumer, the user of steel, and in fact on everybody in the community who uses steel in any of its many forms. That does not strike me as being a particularly good bargain, under any kind of definition.

But there is a further point about this steel. We have already been told that 80 per cent. of it is to come in the form of steel over which we have no control at all. It has come in types and forms of steel selected by the Americans, and it is going to be the kind of steel, inevitably and naturally—and I do not blame the Americans one iota for showing that they are smart business men when our own Government are not—of which they had the least use themselves. Whether it will fit into our industrial production programme and our re-armament programme is a thing we shall find out when the steel has arrived.

The Americans have taken every scrap of raw material for the making of steel. Here again, we have not made a very good showing. We could and should have been making that steel in this country much cheaper had the United States not scooped up all the raw materials and scrap from Europe some time ago, and made it inevitably harder for us to get the scrap material for it. I compliment the Americans on the astute way in which they have bettered the businessmen who represent this country in America. I am not anti-American, I have only one antipathy—I am anti-Tory, and I am anti-Tory on this particular thing because it is a reversal of principle in a remarkably short time, and not only that, but a demonstration that the party of businessmen are not businessmen at all.

I do not blame the Conservative Party for being converted to the principles of State trading. The harsh economic facts of life, as the Leader of the Opposition pointed out, have eventually been impressed upon them, and they now realise the validity of many of the arguments we adduced in support of State trading some time ago. I do not blame them for operating State purchasing, or State trading, or bulk purchase. I do not blame the Americans for getting the best of this particular bargain, but I do blame the Government, after having finally been converted to the principle of State trading, for making such a horrible hash and mess of it as to demonstrate that they have no right ever again to face the country and harp on the superiority of the administrative and negotiating capacities of the Conservative Party.

Mr. John Grimston (St. Albans)

The hon. Member for Islington, North (Mr. Fienburgh), has chosen a very unfortunate series of commodities on which to read us a lecture on bulk buying. If he had known as much as the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) about the metals which we are discussing, he would have known that all the arguments which he has been using against us with regard to bulk buying have very little validity whatever when applied to metals.

I will come to the matter of prices in a moment. May I first deal with the speech of the right hon. Member for Vauxhall? Much of that speech was devoted to criticising American policy and saying how misguided it was. It may be that there is little difference of opinion between us as to whether the Americans have or have not been pursuing a wise policy, but the fact remains that the position when my right hon. Friend went to America was that negotiations regarding tin had been bedevilled for many years. As the right hon. Gentleman knows very well, the Americans had stated publicly that they would not under any circumstances pay more than 1.12 dollars per lb. for tin. Those responsible for buying tin had stated that and then the man responsible for buying had resigned. That was the position when my right hon. Friend had to go to America. The fact that he made a deal at all under the circumstances is a very creditable thing to have done.

As regards the price, the hon. Gentleman said a great deal about the fact that we could have got a very much higher price. We all know that in a period of acute re-armament we can get very high prices indeed, but I wonder if the price of £1,600 a ton for tin—

It being Ten o'Clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Resolutions to be reported Tomorrow; Committee also report Progress; to sit again Tomorrow.