HC Deb 28 July 1952 vol 504 cc1104-8
The Secretary for Overseas Trade (Mr. H. R. Mackeson)

With the leave of the House, I should like to make a statement about lead.

I am glad to be able to inform the House that the Government have decided that private trading in lead can be restored as soon as the necessary arrangements can be made by the Ministry of Materials and the trade. Discussions with the trade will take place at once, and it is hoped that it will be possible to give effect to the decision on 1st October. A further announcement about the date will be made as soon as possible. From the date of reversion the private import of virgin lead will be permitted and the London Metal Exchange will re-open for transactions in lead. The Ministry of Materials will cease to trade in lead except to the extent necessary to wind up its trading operations.

In reaching this decision, the Government have taken account of the improvement in lead supplies, the importance for the export trade of enabling United Kingdom consumers to buy at fully competitive prices, and the advantages to the balance of payments and the position of sterling from the earnings which will arise directly and indirectly from reopening an international lead market in London.

I should like to take the opportunity of acknowledging the understanding co-operation which we have had from the lead producers, particularly those in Australia and Canada, throughout the whole period of public trading during and since the war.

Mr. G. R. Strauss

I should like to ask the hon. Gentleman whether he does not appreciate—as I am sure he does—that about half of our lead supplies come from outside the sterling area; that about 26,000 tons come from Canada, and that the reason for continuing Government purchase was in order to protect our balance of payments situation and prevent private traders, if free, from buying excessive quantities of lead with dollars and not sufficient from the sterling area. Can the hon. Gentleman tell us what steps the Government propose to take to prevent excessive quantities from being bought in dollar and other than sterling currencies, which would possibly do serious damage to our balance of payments situation?

Mr. Mackeson

Yes, Sir, Her Majesty's Government have considered that point, and, as the right hon. Gentleman will be well aware, the arrangements for tin have proved satisfactory. We shall adopt a similar policy to ensure that we do not lose exchange in this transaction. The right hon. Gentleman will, of course, appreciate that the situation with which he was confronted was different from that prevailing now owing to the fact that we have to use gold to balance our payments with E.P.U.

Mr. Strauss

I should like to ask the hon. Gentleman a further question. Tin is no analogy at all, because we do not buy any tin with dollar currency. It is a sterling commodity which is sold for dollars, but the problem about lead is that a large part of it is bought with dollars and currencies other than sterling. The reason no private enterprise trading was previously allowed was not because there was a shortage but because of the serious threat to our dollar position. The hon. Gentleman has not answered my question as to what steps, if any, it is proposed to take to prevent this free trade in lead from doing serious damage to our dollar situation, because unless some specific steps are taken there is the prospect of great damage to our position arising from this freeing of purchase?

Mr. Mackeson

I quite appreciate the hon. Gentleman's point, and steps will be taken through the Bank of England and the Exchange Control to ensure that we do not lose sterling by this transaction.

Mr. Strauss

I am sorry to press the hon. Gentleman, but surely the discussions should have taken place already? The matter was investigated carefully when I was Minister and no one, neither the Metal Exchange, the lead merchants nor the Bank of England, was able to suggest a method of freeing the lead trade in such a way as to safeguard our dollar situation, and it is for that reason that I took no action. Surely, if the Government announce a change of policy now, they should be able to announce at the same time what steps they have in mind to meet the serious danger which is entailed in this proposition?

Mr. Mackeson

I can assure the right hon. Gentleman that all this has been taken into consideration, and Her Majesty's Government have decided, in accordance with their election pledges, to free the London Metal Exchange as we said we would do as and when we saw fit.

Mr. Arbuthnot

Could my hon. Friend say what saving of staff is likely to result from this decision?

Mr. Mackeson

There will be a small saving of staff, but not very much.

Mr. Bevan

As lead is likely to be in short supply for a long time and as lead is one of the raw materials subject to international allocation at the moment, where is the relevance of this change? Will the actual physical supply of lead be increased and the allocation system altered merely by allowing people to make a profit out of the transfer of lead from one hand to another?

Mr. Mackeson

The right hon. Gentleman does not realise that we have very considerable reserves of lead and the supply position is no longer a matter of great seriousness.

Mr. Bevan

Is the hon. Gentleman aware that that statement is entirely inaccurate, and, in point of fact, there exists a continuing shortage of lead all over the world, which was only concealed by the fact that recently there was big stockpiling? Therefore, what is the relevance of the statement now made by the hon. Gentleman to the future procurement and need of lead?

Mr. Mackeson

I appreciate the point made by the right hon. Gentleman. We have given our pledge, we have taken our action, we shall face the consequences.

Sir I. Fraser

May I ask my hon. Friend whether it is not a fact that the present step to free lead is exactly analogous to, and follows logically upon, the freeing of tin, which was much welcomed when it took place a few years ago? Is it not also true, contrary to the statement of the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss)—who ought to know better because he knows this trade—that substantial quantities of tin are bought in Bolivia and tin residues in the United States which cost dollars, and that the previous Government naturally took steps to see that the dollars were rationed? That is exactly what has occurred with lead, so that the danger he apprehends is only mythical.

Mr. Strauss

Is the Minister aware that tin is predominantly a sterling metal, whereas a considerabe proportion of lead is a dollar commodity coming from Canada? Further, is the Minister aware that his statement, without any further elucidation about safeguarding our dollar position, is a very alarming one indeed? It appears to us, unless there is further explanation, that the Government are sacrificing the interests of this country, and particularly the balance of payments, in order to carry out a theoretical freeing of the Metal Exchange of which there was no particular pledge in the election address. It seems to us that the Government are taking a political action with serious economic consequences to this country.

Mr. Mackeson

Perhaps the right hon. Gentleman would take note of the fact that Australia alone produces 220,000 tons of lead, that Germany produces 171,000 tons, and that most of the dollar lead is consumed in the dollar areas.

Mr. Strauss

I am sorry, but that does not alter the fact that one-third of the lead normally imported into this country comes from areas outside the sterling area—26,000 tons from Canada.

Mr. Mackeson

The right hon. Gentleman is misinformed on that subject. The last figure I had was 13,000 tons. If his figure is correct, I shall be delighted to hear it.

Mr. Speaker

We cannot continue the discussion now.