§ 3.42 p.m.
§ Mr. Edelman
I welcome the opportunity of continuing the debate on this Estimate because it gives the Committee an opportunity of considering in some detail this first major essay in bulk trading by the Government, and I hope to show that not only has it been completely unsuccessful but, if it is an example of the manner in which the Government are to carry on with policies of bulk trade, I suggest that the sooner the Government desist the better.
A short time ago I asked the Secretary for Overseas Trade what profit or loss he expected as a result of this transaction in tin which forms part of the more general transactions by which we bought steel from the United States and allowed them in exchange quantities of aluminium, lead and tin. In this transaction we undertook to sell to the United States 20,000 tons of tin at the fixed price of £944 a 2327 long ton, and we undertook to make these quantities available irrespective of the future course of the tin market. That is the point I want to emphasise.
As was to be expected, no sooner had we entered into this undertaking than the price of tin on the world markets immediately rose, so that today the price of tin is in the region of £975 a ton and it seems likely that this figure will continue to rise, despite fluctuations, until, in due course, it reaches a figure higher than £1,000 a ton. When I asked the Secretary for Overseas Trade what the cash result of the transaction was likely to be, he said that he was unable to give any figure because he was unable to say what would be the specification of tin which he expected to sell, nor could he say in which market he expected to find the tin which he intended to deliver to America.
It seems to me that this was an utterly irresponsible transaction which did not do justice to the British taxpayer, who will be expected to foot the difference between the price at which we sold the tin to the Americans and the price at which we shall be able to acquire the tin on world markets. Although the hon. Gentleman was unable to give any estimate of the probable loss which this transaction will entail, I will venture to submit to him an estimate of what that loss will be. I estimate that before the complete delivery of those 20,000 tons to the United States, the burden the British taxpayer will have to pay will be in the region of £1 million. That £1 million will not be a subsidy to any domestic consumer; it will be a parallel subsidy to the American consumer on the one hand and to the Malayan supplier on the other.
If it were just a question of price, if the British taxpayer were merely to be penalised by a subsidy which he will have to give to those overseas interests, it might he tolerable because of certain other invisible benefits which, according to the Secretary for Overseas Trade, are likely to accrue from the general deal which we have concluded with the Americans. However, there is something much more serious than that. It is that to make delivery of this total of 20,000 tons of tin to the United States, we are to deliver a substantial quantity of tin from stock. In fact, I understand that during February and during the current month our 2328 total deliveries from stock to the United States will be of the order of 6,000 tons.
Now 6,000 tons may seem a relatively small quantity but it is a substantial quantity of vital interest to British industry because the total stocks which we normally carry are about 12,000 tons, which represents an industrial consumption of approximately six months. If we are running down our strategic stocks, if we have to denude our own domestic supplies by 50 per cent. of what we normally hold, I submit that our own industry will be placed in extreme jeopardy by this transaction.
If, for example, the situation in Malaya took a sudden turn for the worse, which we trust will never happen; if we found ourselves involved in difficulties in obtaining tin from those sources, we should find that because our own strategic stocks of tin had run down we had deliberately deprived ourselves of vital resources in order to complete the transaction referred to in this Estimate.
I do not suggest for a moment that there is no intended merit in this transaction. Indeed, I recognise that there is substantial advantage to be obtained from the sale of tin which will bring us much needed dollars. But if that argument is advanced—and it was advanced by the Secretary for Overseas Trade—it is no use maintaining the further argument that this transaction for tin is part of an overall transaction in which we exchange our tin for steel. The fact is that we have not exchanged the tin for steel. We are to pay for that steel in dollars. We are to pay for the million tons of steel, which the Prime Minister bought when he was in America, with dollars, of which our earnings in the sale of tin will be an element.
I submit, therefore, that we have to consider this sale of tin entirely on its merits. It seems to me that from every point of view we shall be losing as a result of the undertaking which has been given to sell the tin at a loss. There can be no doubt about it—in fact, the Secretary for Overseas Trade admitted it—and there can be no merit whatever in selling this tin at a loss to the United States. It will threaten and endanger our industry at home.
The amount of dollars which it is likely to yield will be relatively small, compared with what we are to pay to the 2329 Americans for the steel which we buy from them. Consequently, it seems quite clear that there is little to be gained, and very much to lose, from this transaction.
I have spoken already of the difficulties which have existed in the past few months in connection with the sale of tin because of the buyers' strike in which the United States has engaged through the Reconstruction Finance Corporation. As is well known, not very long ago a Senate sub-committee suggested that the tin suppliers of Malaya were gouging the United States—that is the picturesque word which they used—and exacting exorbitant prices for a commodity which was necessary for the United States defence programme.
They advanced their argument when the price of tin had risen to something like £1,600 per ton, and there is no doubt that at the time there had been considerable profiteering in the sale of tin on the free market. For those reasons, it was quite legitimate for the Americans to complain of the extravagant prices which they were being obliged to pay. As a result of their holding off, as a result of their restraint from buying, the price of tin came down and consequently, in due course, it reached a relatively normal price; and from the point of view of the actual cost of production, and the selling price which was being charged, the Americans could make little just complaint.
Despite that fact, the Reconstruction Finance Corporation persisted with its refusal, on the one side, to buy tin directly from Malaya, and the Malayan tin producers, on the other side, showed extreme and, in my view, quite unjustified reluctance to associate their tin production with the work of the International Materials Conference. The direct result of their refusal, on the one hand, and the buyers' strike of the Americans, on the other, was that a complete and artificial disorder was introduced into the tin market, with which the Estimate now before the Committee directly deals.
We have reached a position, as far as tin is concerned, in which the Americans, to save face—that can be the only reason for their request to the British Government as such to intervene as brokers in this transaction—have come to the British Government who have, quite unjustifiably, agreed to act as brokers in 2330 this transaction, with the result that the only people who will suffer will be the British taxpayer and the British industrialist.
This question of tin illustrates a much wider question to which the Estimate has reference; that is, that the semi-barter arrangement into which the Prime Minister entered when he was in America, by which this transfer of steel from the one side, and tin, aluminium and lead from the other side, should point the way to something considerably more important: that is, that what we require as between ourselves and the United States during our present difficulties is a common pool of resources. As things stand, whereas the Americans have had the acumen to sell their steel at a fixed price, which will bring them a guaranteed profit, we have been jockeyed into the very unfavourable position in which we have had to engage in these transactions at a certain and inevitable loss.
If the Secretary for Overseas Trade is going to say that it would be impossible for him to gauge the future trends of the market, I would invite him merely to look at the graph of prices of the past year. There, he would see that for the last six months or so the price of tin has rarely, if ever, fallen below the price at which the Government have sold the 20,000 tons of tin to the United States. Consequently, little economic perspicacity is needed to recognise that the price of £944 a ton was seriously disadvantageous to this country.
Therefore, I ask the hon. Gentleman whether, even at this late stage, it is not possible for him to address himself to the United States and to invite them to introduce into this transaction a rise and fall clause which would save the British taxpayer from what is likely to be the very unpleasant necessity of subsidising foreign trade in the way I have outlined.
I have spoken about a common pool of resources. I hope that a serious lesson will be learnt from the demerits of this transaction. That lesson should be that the International Materials Conference is an organisation full of promise and one which has already brought order into various commodities in which we have to deal; and if the tin producers of Malaya and Her Majesty's Government will try to arrange, together with the United States, to bring the tin producers into the International Materials Conference, 2331 we can hope that there will be a stable market from which both we, the Americans and the Malayan tin producers will all benefit.
§ 3.58 p.m.
§ Mr. John Grimston (St. Albans)
These debates always seem to introduce a good deal of criticism of the policy of the United States Government and, generally, very little understanding of it. It seems to me that the real benefit of the tin agreement is that it broke a deadlock which had existed for two years and which had prevented the United States from acquiring tin which we have and which we were anxious to sell because of our stock position.
There is no need for the hon. Member for Coventry, North (Mr. Edelman), to bolster up his case by failing to compare like with like. He says that today's price of tin is £975 a ton, but he is, of course, giving a price for tin delivered in this country, whereas the price quoted in the agreement is loaded on to the ship at Singapore if we wish it to be there. Therefore, the disparity in price is not between £944 and £975 a ton, a difference of £31; the difference today is much nearer £7 or £8 a ton. Consequently, the amount of money at present at risk, which was quite freely admitted by my hon. Friend the Secretary for Overseas Trade, is very much less than the hon. Member for Coventry, North, would have us believe.
I believe that even the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) joined in the chorus which criticised the commercial policies of the United States when he said that the United States were stockpiling on much too heavy a scale, but he will know perfectly well that the United States stockpile has been built up to a very large degree by obtaining supplies which would not otherwise have been obtainable. In zinc, for example, he must know that they built up their stockpile from about 1946 onwards.
It seems to me that we have a greater interest than anyone else that the deadlock to which I have referred should have been broken. We are interested not so much in the profit on one transaction, but in the continuing trade and steady flow of business and currency to this country.
§ Mr. A. Edward Davies (Stoke-on-Trent, North)
The hon. Gentleman says that this stock is not located in this country. Did not my hon. Friend the Member for Coventry, North (Mr. Edelman) make the point that some was in this country and that it had been taken out of stock? Will not shipping charges therefore have something to do with the price?
§ Mr. Grimston
Under the agreement it is at our option whether we supply from this country or from the Far East and, therefore, the price would clearly relate to which it was cheaper for us, at the time, to supply.
§ Mr. Edelman
Is it not the case that 6,000 tons have been sent from here to New York and that the greater part of it was bought at the prevailing very high prices, much of it over £1,000 per ton, which ruled last year?
§ Mr. Grimston
The hon. Gentleman must have sources of information which are not open to other hon. Members, because when anyone asks at what price these stocks were bought, the answer is invariably that it is not possible, in a continuing business, to say at what price any one particular parcel was obtained.
The hon. Member for Islington, North (Mr. Fienburgh), as well as the hon. Member for Coventry, North, suggested that this transaction was evidence of a conversion by the Tory Party to the advantage of bulk buying. Let me assure him that it is nothing of the kind. It is simply an admission, which I thought was common ground between all parties, that when we are in a heavy re-armament programme we should share out these scarce materials rather than have Allies bidding one against the other and putting up the price. That is the whole basis of the International Materials Conference, in which the hon. Member for Coventry, North, takes a very great interest.
§ Mr. Grimston
The right hon. Gentleman says it is bulk buying, but I should have thought it was the kind of conduct which all parties would agree that, in a re-armament programme or indeed, in war, was a sensible course to take. No one was committed to it more strongly than was my right hon. Friend who is now the Colonial Secretary, when he was 2333 Controller of Non-Ferrous Metals at the beginning of the last war.
When the negotiators at the International Materials Conference recommend a price for tin, in an agreement such as this, they must clearly have comparison with prices obtained for other similar products, and clearly the product which would be most in their minds when they were dealing with tin would be the other major non-ferrous metal, copper. The 1938 price for copper, in cents. per pound, multiplied by 2.7, comes to today's controlled price for copper. The 1938 price for tin, multiplied by the same figure, 2.7, comes to 1 dollar 18 cents. per pound.
Consequently, if we accept, as I think we all do, that the International Materials Conference and the sharing out of scarce metals is a good thing, then there can be no criticism of the figure of 1 dollar 18 cents. per pound which was finally agreed, because it bears relation to the other prices which are controlled, in the case of copper predominantly by the American Government.
When my right hon. Friend the Prime Minister went to America he was confronted with a great many statements about the very strong position which had been adopted by high American officials, and if he were to break the deadlock he had to establish some basis from which to negotiate. Consequently, a basis which bore the same relationship to two major non-ferrous metals—the relationship between their current price and their pre-war price—would seem to be as good a basis as any from which to negotiate.
Hon. Members opposite, who are interested in the International Materials Conference, need be under no misapprehension. American officials feel that they have been much more generous in their sharing of scarce materials than we have, and they always point to tin and wool, two products which we control and which we have so far refused to share on an International Materials Conference basis.
It seems to me that the price of 1 dollar 18 cents. has one further great advantage—it has introduced some stability into the tin market. Indeed, we have seen in the Press today that it has led the way to a similar agreement between the United States and Indonesia, under which the United States are paying, and Indonesia are receiving, the same price 2334 as that which we agreed. Great benefit will accrue to these territories, in which hon. Members in all parts of the Committee are very much interested.
There is a danger, too, in very high prices. A relatively higher price than that of other metals would be against the long-term interest of tin itself, and equally against our own long-term interest. High prices mean very high profits in the short run, but they also encourage the use of substitutes—and tin is a metal for which there are many substitutes and in the case of which there has always been unusual pressure to discover further substitutes. Consequently, I think we can say that it is in the long-term interest of Malaya, as well as of this country, that this agreement has been reached.
I have one criticism to voice on which I should like my hon. Friend to comment, although I do not think anything can be done about it at the moment. The shipment of this tin, with the exception of one shipment, is being done entirely in American ships. Traditionally it has been done in our shipping, and I hope that in any further agreements, or in any extension of this agreement, provision will be made, if possible, for delivery to be made c.i.f. American ports so that we should control the shipping.
In view of past history and of the position adopted by top men, we must recognise that, on the whole, the agreement is satisfactory. The part I like best is that which occurs at the bottom of the page, in paragraph (6), where it says that…it is the desire of both parties that more normal arrangements for the conduct of this trade should be established as soon as possible.That is the most important statement to have put into this agreement.
§ 4.8 p.m.
§ Mr. Jack Jones (Rotherham)
I want to say a few words about this tin transaction. When the Prime Minister came back from America, he was hailed because he had made arrangements whereby this country was to get a million tons of steel. On the face of it that looked like many other Tory proposals, an extremely good thing; but, like many other Tory proposals, as time went on it was found not to be quite so good as it appeared at first sight.
I agree with my hon. Friend the Member for Coventry, North (Mr. Edelman), 2335 that the loss of dollars, which will have to be borne by our people, is a serious matter, but I also want to ask this: was the tin transaction a good transaction so far as our steel industry is concerned? I suggest that it was not a good transaction at all. We have the spectacle of 6,000 tons of one of our most precious strategic materials leaving the country, not only at a time when we are talking about re-armament but also when agricultural interests, which are represented mainly on the benches opposite, are crying out for more sheet tin for canning fruit and vegetables. Probably my hon. Friend the Member for Faversham (Mr. P. Wells) will have something to say about that, as it affects his constituency.
There is, however, also the question of the payment of dollars for this steel. This is a fantastic arrangement. In this country—in my constituency and in Sheffield, Middlesbrough and South Wales—we have steel-making plant which is not being used. Men and works are standing idle. I respectfully suggest to the Ministry of Supply and to the other Ministries concerned that it would have been a far better thing had the Prime Minister used some practical "nous," as we say in the North, or practical common sense, and looked at the position in which we found ourselves.
Here we have the spectacle of scrap being trans-shipped all the way from Germany to America; iron-ore being trans-shipped all the way from Spain and Sweden to America; being loaded, transshipped, unloaded again, converted into ingots, some of which are already proving to be not very good metal—I have received some evidence about that in the last few days—and then trans-shipped back to this country.
How much better would it have been to have used a much less quantity of tin to earn sufficient dollars to pay for the raw materials. Our men in this country could have worked them, and we could have obtained the conversion value; and, in addition, have been able to supply our own people, knowing our own demands, with the types of steel they require.
I consider that the whole transaction requires looking at again and, if it is not too late, it should be amended. That would result in great benefits, not only to 2336 the people of this country but to trade and industry at a time when re-armament imposes such a huge demand on our steel supplies.
§ 4.10 p.m.
§ Mr. A. Edward Davies (Stoke-on-Trent, North)
I should like to hear from the Ministry what progress has been made in the discussion of this and similar transactions with the American Government and with other Governments concerned.
It seems that the violent fluctuations in the price of these necessary commodities does no country any good. It does Australia little good to get an inflated price for primary commodities, if, in the course of a few months, there is a recession which results in a contraction of trade, with deleterious effects upon our exports. The gain leads to a loss, in this case in terms of our civil economy, textiles, pottery, and so on, which have to be cut down because Australia has exchange and balance of payments difficulties.
Australia was able to get very inflated prices for wool, and South-East Asia very high prices for tin and rubber. Then, suddenly, there was a recession which put the whole economy out of balance. I agree with the view that in these matters, which are so vital, not only to our rearmament programme, but to our civil economy, it should be our aim, where there is a shortage of supplies, to get an agreement which would enable us to get reasonable shares at fair prices. May we be told what has happened in that connection?
§ 4.14 p.m.
§ Mr. S. N. Evans (Wednesbury)
We all agree it would be a good thing if we could contrive some kind of international agreement regarding these primary products. But, meanwhile, it is not unreasonable for us to expect our American friends to be rather more fair. I do not accept what has been said about the undesirability of discussing Anglo-American commercial relations with freedom.
We are having to pay about four times the cost of production for cotton, and that is on a free market. If we complain, it is said, "That is the mechanism of the market at work. The price of an article is what it will fetch. That is the system 2337 we believe in. We are sorry, but we cannot do anything about it." But when it comes to sterling area primary products, in this case tin, a buyer's strike is staged for about 12 months. During the whole of that time Mr. Symington's "barrow boys" were buying up odd lots all over the non-sterling area.
Then the Government enter into a fantastic agreement which has no relation at all for the financial plight in which we find ourselves. Surely, having regard to the respective financial strength of the two countries, it is a most fantastic thing that the British taxpayer should have to subsidise American manufacturers using Malayan tin.
§ Mr. J. Grimston
Does the hon. Gentleman' think it unfair that we should have to pay two-and-three-quarter times the pre-war price for American copper, and the Americans should have to pay two-and-three-quarter times the pre-war price for British tin? Does not he think the two transactions perfectly fair to both parties?
§ Mr. Evans
No. What I am saying is that the Americans should make up their minds. I know that there are certain elements in America who are fighting two wars—one against Communism and the other against the sterling area. Which they regard as the more important is not quite clear. [HON. MEMBERS: "Shame!"] What I am saying is that they should make up their minds. When we come into the American markets for supplies, they demand that we must put up with the mechanism of the market, the system under which the price of an article is what it will fetch.
That is the system in which they say they believe and to which they make us adhere. On the other hand, in the matter of sterling area traditional dollar earners they themselves fix the price. I say that that is something which cannot be allowed to go on if there is to be the happy Anglo-American relationship which we all desire.
I support hon. Members who have urged that attempts should be made to bring about international agreement in these matters. Meanwhile, I ask the Government to point out to our American friends that conduct of the kind which governs this tin transaction can only have the effect of increasing our dollar prob- 2338 lems. What is sauce for the goose is sauce for the gander. If they insist that we pay the price fixed by the market, we, in turn, are entitled to expect that they will be prepared to abide by the same principle.
§ 4.18 p.m.
§ Mr. Peter Roberts (Sheffield, Heeley)
I cannot let the remarks of the hon. Member for Wednesbury (Mr. S. N. Evans) go without challenge. He said that the Americans are trying to carry on a battle against the sterling area. I am sure that all hon. Members on both sides of the Committee realise how much the United States have done to bolster up the sterling area and the currency of this country. What they are doing about further American loans also shows that.
I wish to refer to the purchase and storage, etc., of tin and the figure of £7,830,000 less appropriations-in-aid, and to ask the Minister whether he can give me some information. We have heard a great deal about this transaction with America and the sale of tin at various prices. But in answer to me today, the Minister has shown that in the year ended December, 1951, the following tonnages of tin were supplied to what one might term the Iron curtain countries: 1,800 tons to the Soviet Union; 200 tons to Poland; 200 tons to Yugoslavia; and over 700 tons to China.
Would it be possible for the Minister to say what were the prices in those transactions, assuming that I am right in thinking that they came out of this purchase and storage amounting to over £7 million? If he can give us some idea of what these transactions are, we should then be able to judge them in the light of the criticisms we have heard from the other side of the Committee.
At this stage I cannot talk about future policy. All I can say is that we are so short of tinplate that we need all that we can get for the canning of our own materials here at home. When I see that over 3,000 tons of this precious metal is being sent to China and to other countries who follow policies which are designed to undermine our economy, it fills me with a certain amount of trepidation.
I hope that the Minister will give some idea of the prices involved in these transactions. Although I cannot now ask for an assurance that we shall not have to 2339 put up with the same state of affairs under the present Government, I hope to raise this question on another occasion.
§ 4.21 p.m.
§ Dr. Barnett Stross (Stoke-on-Trent, Central)
I hope that the Minister will accede to the request of the hon. Gentleman the Member for Heeley (Mr. P. Roberts) and give details of the export of tin to countries behind the Iron Curtain and to China. Perhaps the reason I augment his request is not entirely the same as that which actuated him in making it. I believe that we should trade throughout the whole world and that nothing but good can come from selling tin wherever we can find a market at a reasonable price.
§ Dr. Stross
I can say at once what the hon. Gentleman has so often said to us, that we, too, need to live. We must import certain goods and to do that we must export.
I should be out of order if I went too far, but earlier today we heard a defence of the export of tinned steak from Manchester to Canada. The transaction under discussion relates to selling tin rather cheaply, as it appears, to the United States market at a time when we appear to be buying steel rather dearly from the same source. As there are about 2,000 steel workers in my constituency, it is fair that I should refer, after the reference by my hon. Friend the Member for Rotherham (Mr. Jack Jones), to the need for having more scrap and the avoidance of transshipment.
We heard the statement by an hon. Member opposite that the United States are still making loans to us and that we ought to bear that in mind. I am sure that we do. We must carefully consider all the past generous actions of the American people. There is nobody on either side of the Committee who does not remember that.
§ Mr. Ellis Smith (Stoke-on-Trent, South)
Will my hon. Friend also bear in mind that Mr. Stettinius said that the loans bought time with the lives of the British people?
§ Dr. Stross
I am grateful to my hon. Friend.
None the less, we are faced with the fact that loans from the United States earmarked for our assistance, not only here but in Western Europe, are essentially and specifically to be earmarked, in the main, only for re-armament purposes. Our economic situation makes it difficult for us to understand why the richest country in the world seeks a bargain from another country upon which in the past it had to depend so much and upon which it must still depend today.
The British taxpayer in subsidising, as he would appear to do, the American businessman in this transaction must find himself in a quandary. On the one hand, we seek aid, and, on the other, we find that we are giving assistance. We do not deplore this, nor do we deny it. We are willing to do it, if we can afford to. We ask the Minister whether he thinks that the Government were really well advised on the terms of this commercial transaction. If he feels that there was no other way out, if he feels that such pressure was brought to bear that no better terms could be had, it is not for us to do more than voice our discontent and to say, "We are sorry to hear it, and we think we might ourselves have done somewhat better had we been on the Government benches."
The Minister shakes his head, but the country is bound to ask about this. It is difficult to understand why we have to subsidise the American businessman in this transaction. It is of some moment that the market is asked to be the deciding factor when, as it were, the boot is on the other foot. I hope that, in answering the debate, the Minister will give a clear indication of what pressure was brought to bear upon our people which made us agree to this type of assistance to the Americans.
§ 4.26 p.m.
§ Mr. Cyril Osborne (Louth)
I wait with interest to hear this transaction carefully explained. I want to emphasise the protest made by my hon. Friend the Member for Heeley (Mr. P. Roberts) at the bitter anti-Americanism that comes from the hon. Member for Wednesbury (Mr. S. N. Evans). In this he seems to be just about as wrong as he is in his attitude to farming. He said a dreadful thing. It was dreadful of him to say in this Committee 2341 that there are responsible elements in America who are fighting two wars, one against the Communists and one against the sterling area—
§ Mr. Osborne
—and that he is not sure whether they do not regard the sterling area as a greater enemy than the Communists. That is a shameful and disgraceful remark to make. I should like him to retract it. if there is to be any security for the civilisation in which he believes, and in which we believe, it will be provided only if the British and the Americans stand together.
§ Mr. Osborne
That is not the point. Irrespective of whether this is a wise transaction or not, whether the deal is a good one or not—and we shall get the facts later—we have heard the usual type of argument that comes from the opposite side of the Committee. Whenever American affairs are discussed there is a spirit of enmity and hatred. [HON. MEMBERS: "Nonsense."] It is not. It seems now that hon. Members opposite, having failed to get everyone to "go to the Left," as they hoped to in 1945, must turn bitterly anti-American.
It is because I believe that the future of the English way of life, as well as the American way of life, depends upon our mutual forbearance and understanding, that I regret so much that an hon. Member should make such a remark. I would remind him that, almost immediately afterwards, he said that he hoped that the happy Anglo-American atmosphere would continue. That is what we all want. He does not go a very good way about getting that happy atmosphere when he accuses responsible elements in America of hating the sterling area more than they hate Communism.
§ Mr. Evans
I did not say that. Hon. Members must quote me accurately. What I said, if the hon. Gentleman wants to know, is that certain elements in the United States are fighting two wars, one 2342 against Communism and the other against the sterling area, and that which they regard as the more important is not yet clear.
§ Mr. Osborne
Taking that statement as it stands it seems that, in the hon. Member's mind, there are responsible people in the United States who may regard the sterling area as a greater enemy than the Communists.
§ 4.31 p.m.
§ Mr. Percy Wells (Faversham)
I enter into this debate only for two or three minutes, not to criticise the United States, although I must say that I listened to those criticisms with much more tolerance and patience towards the hon. Member for Wednesbury (Mr. S. N. Evans) when he is talking on this subject than when he is talking about agricultural matters, about which of course, we are fairly well agreed—those of us who do know something about agriculture—that the hon. Member knows very little indeed.
To come to the matter now under discussion, what I am concerned about is that there are in my constituency a number of constituents who are unemployed because of the shortage of tinplate. That is bad enough, but what is worse is the fact that, owing to the reduction of 20 per cent. in the allocation which is to be given this season, there will be many tons of good fruit in my constituency that will not be picked, but will be wasted because canning facilities will not be available. At present, vegetables are already being wasted because of the lack of tinplate with which the industry is faced.
That being so, it is very difficult for me, and for those of my constituents who are concerned, to understand how it comes about that, at a time such as this, 20,000 tons of tin can be sent to the United States, and that, too, at a time when we are restricting imports of this type of food upon which we have relied to a very great extent to give us more variety in our diet. I therefore hope that the Minister will be able to give us some assurance that the question of the 2343 reduction of 20 per cent. in the tin allocation to the canning industry will be looked into, because if he can give us some assurance that that will be done I am quite certain that he will win the thanks of the fruit growers not only in my constituency but in other fruit-growing areas throughout the country.
§ 4.34 p.m.
§ Mr. Robson Brown (Esher)
I had originally no intention of taking part in this debate, but I feel that it is necessary to correct an erroneous impression among hon. Members on both sides of the Committee who are confusing virgin block tin with tinplate.
While they are related commodities, I think it is correct to say that virgin block tin is in good and ample supply, as far as the sterling area is concerned, and is exercising no control on the production of tinplate. I think the Prime Minister was very wise, and showed extraordinarily good business acumen for a politician, in making the transaction over the sale of tin to the United States which he did and at the price at which he made it.
I put it to the hon. Member for Coventry, North (Mr. Edelman), that I do not think he would like to go back to his constituents and tell them that difficulties were due to the storing of block tin in our warehouses when that material was in ample supply, and not giving the workshops of Coventry the raw steel necessary for their own production.
§ Mr. Edelman
The hon. Gentleman has missed my point. This is a question of block tin which we have exported to the United States from our own strategic stock. There has been a substantial rundown in our stocks, not only in regard to the defence programme but also for current industry, and, in attacking this transaction, I was, in fact, defending my constituents.
§ Mr. Robson Brown
I appreciate the hon. Gentleman's sincerity in this matter, but if he suggests it is an alternative between carrying stocks of a material of which we have a substantial supply for strategic purposes and restrictions in steel, there is only one answer, which is the one I have already given.
Turning now to the hon. Member for Wednesbury (Mr. S. N. Evans) and his 2344 indictment of the United States, the basis of his argument was that the United States believes in free trade and in the mechanism of the rise and fall of the flee market and the prices in a free market. Does he realise that the steel to be supplied by the United States, and negotiated by the Prime Minister, was sold at a fixed price, which was below the world market price, and substantially below it, so that we received a considerable financial concession thereby?
§ Mr. G. R. Strauss
Does the hon. Member for Esher (Mr. Robson Brown) also agree that the price we are to pay for the steel is not a fixed price yet, but that it can be fixed at any time at what is called the controlled price, that the United States Government can alter that at any time and that, therefore, we do not know what the price will be?
§ Mr. Robson Brown
In reply to the question by the hon. Member for Wednesbury, the price of steel was a price above the British price, and I am glad that the hon. Gentleman gives credit to British steel manufacturers as being still capable of making steel at a lower price than the rest of the world. I repeat that that price negotiated in the United States is substantially below the price that could have been obtained in the world market.
The implication of what the right hon. Gentleman the Member for Vauxhall (Mr. Strauss) said is that the United States will take advantage of the negotiations, or of any clause in the agreement, to put up the price substantially.
§ Mr. Strauss
I am not suggesting that, and I should not like that implication to go out. The price at which we have bought is the American internal controlled price. At some later time, at any time, in fact, we cannot say that we shall know what the price will be, because the American price could easily rise 5 or 10 per cent. during the course of a year. I am not suggesting that it would be done to take advantage of us, but that we do not know what the price is going to be.
§ Mr. Robson Brown
I would concede that argument to the right hon. Gentleman without question.
I come back to a very much more important matter, and I want to remind the Secretary for Overseas Trade that the United States are to receive immediate deliveries of tin, whereas we, on our part, are not by any means receiving immediate deliveries of steel. I think that, in the representations which he makes to the United States, there should be some suggestion for expediting the deliveries, in order to get some of these materials into those of our factories which are now working short time or are closed altogether and bring them into operation on re-armament.
I would add one other comment, and I say this deliberately. There is a feeling among some of us that the rapid expansion of the United States steel industry, both in its proportions and in its volume, may tend, and has, in fact, tended, to reflect itself upon the productive steel industry of this country, and particularly in matters of raw materials, such as scrap, iron ore and the like. The most generous offer they could make to us, and the most positive contribution they could make to our re-armament, and the general good will of the people of the countries of the West, would be for them to realise the right and opportunity of British steel to expand at a proper and balanced pace.
§ 4.39 p.m.
§ Mr. Malcolm MacMillan (Western Isles)
I agree with the hon. Member for Esher (Mr. Robson Brown) that it was necessary to make some clarification about block tin and tinplate. The impression has unquestionably got abroad among the people who are dependent on tinplate for their employment that they are being sacrificed to other considerations, such as exports, and, as this matter has not been ruled out of order, I want to say a word or two, because in my own constituency I have the same problem which arises in connection with the Ministry of Food, though it is not the direct concern of the hon. Gentleman on the Front Bench opposite.
We have not many fewer than 1,700 people unemployed at present. A firm which has had its allocation of tinplate cut down has been given no concession 2346 by the Ministry of Food regarding restoring or increasing its allocation, though that would give a prospect of increasing unemployment and also the food supplies of the country. It is a small firm which could rapidly expand its supply of canned blood pudding. It also produces a fine quality product of canned tripe and onions. I am sure that the hon. Member for Louth (Mr. Osborne), for instance, realises that tinned tripe is much better than the variety thrown across the Floor of the Committee from the benches opposite.
This firm has applied, through myself and in other ways, for an additional allocation from two points of view: first, to extend the opportunities of employment among its own employees, and, second, to try to make a better contribution to our very necessary and scarce food supplies. All the ingredients of these two excellent dishes which they can are available locally, and if they are not canned they will simply go to waste.
I think that is a monstrous thing at this time, the more so because there is local unemployment there at the moment. Though I appreciate the difficulties about block tin and tinplate, the confusion has at least given me the opportunity of asking for further clarification on this matter in the interest of public morale, because the people in these areas are victims in the interest of exports.
§ Mr. Robson Brown
Would the hon. Gentleman be good enough to explain something which should be made clear to hon. Members? Tinplate is merely a thin sheet of steel coated with tin.
§ Mr. MacMillan
I quite appreciate the point. There was a time in my own capitalistic youth when I could have wished it were otherwise, when it was difficult to sell tin at a very much lower price than it is fetching today. Unfortunately, my interest in tin has passed with the passage of time. The hon. Gentleman's point is, of course, correct. I do not know the technicalities, but I know there is that difference. I am glad you did not rule my contribution to the debate out of order, Sir Charles, and I hope, as a result of it, to get a firm statement from the Minister on the subject.
§ 4.43 p.m.
§ The Secretary for Overseas Trade (Mr. Henry Hopkinson)
We have had about an hour's debate on this Estimate today and about an hour's debate on a previous occasion. The first time we debated the Estimate I gained the impression from the right hon. Member for Vauxhall (Mr. G. R. Strauss) that this agreement was welcomed by all sections of the Committee. Indeed, I certainly believe that was the feeling on 21st February when, as I say, we first debated the matter. But today there seem to be some doubts in various quarters as to whether it is a good agreement or not, and, indeed, whether it should even have been made at all. I cannot help feeling that the first impression was the right one and that this agreement ought to be welcomed by all sections of this Committee and of the country.
I propose to try to reply to the points raised both in the previous debate and also in this debate this afternoon. But before I do so, I think it might be for the convenience of the Committee if after the lapse of nearly a month I were to say something about the way in which the transaction in regard to tin, which is the subject of this Estimate, is going. It is still too early to make any assessment of the final results, although we have no reason to believe that they will be unsatisfactory.
In reply to the hon. Member for Coventry, North (Mr. Edelman) and other hon. Members, I should like to quote what I said in the concluding passage of my speech when I introduced this Estimate on 21st February. I said: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."—[OFFICIAL REPORT, 21st February, 1952; Vol. 496, c. 544.]
§ Mr. Edelman
Will the hon. Gentleman say whether the tin transaction was a definite quid pro quo for the steel transaction asked for by the United States?
§ Mr. Hopkinson
I shall be covering that point in the course of my remarks this afternoon.
The position is that we have made very great progress in securing and shipping tin; much greater progress, in fact, than we originally expected. Deliveries have already been made, and substantial payments of dollars have been received. When we last debated this Estimate I told the Committee that we expected that 4,000 tons of tin would have been delivered and paid for before the end of the financial year. We have, in fact, been able to improve considerably on that figure. We have already shipped just over 5,000 tons, and we now expect to be able to ship a further 3,000 tons before 1st April. We have already received £2,500,000 against these shipments, and we should receive substantial extra payments before the end of the financial year.
The speed with which we have been able to act in this way has earned us the gratitude of the United States Government who need the tin. Indeed, it has provoked their admiration. It will, of course, mean—and this is very important to us—that our dollar payments will begin and will be received far earlier than would otherwise have been the case.
§ Mr. Edward Davies
Will the hon. Gentleman tell us whether the tin has been exported from this country or from its original source?
§ Mr. Hopkinson
Partly from this country and partly from Malaya.
As I said, it is of great importance to us to get our dollars as soon as we possibly can. I mentioned to the Committee on the last occasion that the payments would amount to 52 million dollars for the whole year. On the other hand, by following a policy of steady buying, we have avoided any artificial boom in the price of tin, which is, in fact, generally speaking, rather lower today than it was a month ago.
These achievements, however, have led to certain accounting difficulties which are exceptional and possibly unprecedented. Every effort was made to ensure that the Estimate now before the Committee should be as realistic as possible, but, as I pointed out in my earlier remarks, it was uncertain whether particular purchases and receipts would fall 2349 into the account for this year or next. We could not, for example, control the availability of ships which are nominated by the United States Government. Again, we cannot say when payments must be made for Malayan tin.
§ Mr. G. R. Strauss
On that point, which is a very important one, does the Minister mean that the metal is only being shipped in United States ships, as suggested by the hon. Member for St. Albans (Mr. J. Grimston)? Is that part of the agreement? It does not appear in the agreement but, if that is so, it is very serious.
§ Mr. Hopkinson
It is to be shipped f.o.b., and the Americans have the right to nominate the ships in which it is carried.
§ Mr. Strauss
Does that in fact mean it is all going in American ships and we cannot ship it in our own ships?
§ Mr. Hopkinson
They have the right to nominate the ships, and in point of fact they have nominated mainly American ships. We cannot say precisely, and certainly not to a day or two, when payments from America will be received. All these factors affect the outcome of this Vote, and their effect has been accentuated by the purchases and deliveries to which I have referred.
It has become clear from our latest estimates that we shall exceed the estimated gross expenditure on the Estimate now before the Committee. It by no means follows that the net total expenditure in the Estimate will be exceeded. To the extent that the gross expenditure is exceeded this year, we shall spend correspondingly less than the gross amount shown in the Estimate for next year, which is now being printed.
Therefore, although there will be a departure from the proper financial and accounting procedure, it is a matter of timing only. We regret that we cannot avoid this by amending the existing Estimate before the Committee. We are, however, so near the end of the financial year and to the time when the Consolidated Fund Bill will be taken that it is out of the question to submit an amended or Supplementary Estimate. But I felt it was as well to inform the Committee of this development this afternoon so that hon. Members might know the posi- 2350 tion. It will be regularised, of course, by asking for an excess Vote at the appropriate time.
I now turn to the questions which have been put to me this afternoon. I should like to deal first with the comment made by the right hon. Gentleman the Member for Vauxhall, and other hon. Members on the benches opposite to the effect that the conclusion of this deal represents a belated conversion of the Conservative Party to the principle of bulk buying.
I will not labour the point that the objection of the Conservative Party was directed not so much against bulk buying as against State buying, but I must make it clear that in this transaction, or series of transactions, neither bulk purchase nor State buying in the ordinary sense are involved. There is no question of bulk purchase in the usual sense in the case of tin. As was pointed out from the benches opposite, Her Majesty's Government are acting as brokers for the United States Government, and if anybody is carrying out bulk purchase it is the United States Government.
I was asked why Her Majesty's Government are buying tin when the Americans could have purchased it them selves. The plain fact is that the Americans made it clear by their attitude that they would not buy on a variable market of which they were still suspicious, however ill-founded those suspicions might be. In order to get tin moving and to get the agreement as a whole, with substantial advantage to ourselves, we offered to take the market risk for them.
In the case of aluminium, it is of course a loan to be replaced by the United States by the middle of 1953. It is true that the Ministry of Materials are continuing the existing system of buying through public channels, but this transaction represents no new extension to the principle. I will concede to the right hon. Gentleman the justice of the claim he made on the 21st February, that the loan of this aluminium to the United States Government was made possible by the foresight of the late Government in securing very substantial quantities of aluminium from Canada.
As to the section of the agreement dealing with making steel available, here again there is no question of State buying. It is being bought not by the British Government but by the iron and steel 2351 industry, acting through the British Iron and Steel Corporation. The right hon. Gentleman inquired whether we should receive the 125,000 tons in the first quarter and 250,000 tons in the second quarter to which we are entitled under the agreement. The answer is that we can expect at least these amounts to be delivered in the United States and elsewhere in the first quarter and second quarter respectively. The agreement, however, refers to deliveries only, and it is a fact that some small parts of the arrivals in this country may slip into the first part of the following quarter concerned.
I agree with the right hon. Gentleman that it would have been better if we could have received higher quantities in the first and second quarters of the year, but he will realise that arrangements for carrying out a deal of this magnitude could not be made quickly if we wanted to make sure of getting the types and quantities of steel we require.
§ Mr. Hopkinson
With respect, Sir Charles, all this arises out of questions put to me in a previous debate, all of which were concerned with this agreement and which were then allowed and the need for this Estimate arises from that agreement. As you will remember, it was pointed out the other day that this is not a Supplementary Estimate but a new Estimate, and therefore we were then allowed to range fairly widely.
§ Mr. G. R. Strauss
Further to that point, Sir Charles. We are dealing with a Supplementary Estimate connected with 20,000 tons of tin, and the justification for that Estimate is that we are receiving a certain amount of steel in exchange. Therefore, before the Committee can decide whether this Estimate is justified, I submit to you—and I think it was agreed last time we discussed it—that we are entitled to ask questions and to receive answers as to whether we shall receive the right type of steel at the right price at the right time. I submit, with respect, that you should allow answers to be given on those points.
§ The Chairman
That seems to me very wide of the subject with which we are dealing. However, if it is the wish of the Committee I will allow the hon. Gentleman to continue with that point.
§ Mr. Hopkinson
I was about to point out that the right hon. Gentleman was quite right when he said he assumed that pressure was put upon the Americans to deliver as much as possible of the one million tons in the first quarter of the year. The figures finally agreed upon were the best we could achieve. The right hon. Gentleman also complained that the Government had agreed to sell tin at a fixed price—and this point has been raised by several other hon. Members—whilst we bought steel at American internal controlled prices which might be varied during the year.
The right hon. Gentleman asked me specifically to say whether we had agreed willingly to this provision or whether it was forced upon us as condition of securing the agreement at all. As I understood it, he wanted this information in order to know in which direction to address his criticism. Well, I am afraid I cannot agree that this is a matter for criticism at all. If the right hon. Gentleman thinks it is, I feel he is entirely misjudging the aims and the atmosphere of the negotiations.
The object of both parties was to achieve an agreement which would be mutually satisfactory in order to help us both out of our difficulties, our shortage of steel on the one hand and the American shortages of tin and aluminium on the other. I have referred to the purchase of steel and tin, but the conditions relating to the two metals are not the same. In the case of steel it was a concession to us that we were allowed to buy at the internal controlled price rather than at the higher export price. In the case of tin, we agreed on a price which, as my hon. Friend the Member for St. Albans said the other day, was substantially higher than that which the United States had hitherto been willing to pay, which was 1 dollar 12 cents a lb. c.i.f. as compared with 1 dollar 21 cents a lb. c.i.f. (or 1 dollar 18 cents a lb. f.o.b.) as given in the agreement. It was not a question of being willing or unwilling to make the agreement. It was not a question of whether it was right or wrong. The agreement did not give 100 per cent. satisfaction to either side but 2353 it was hammered out in negotiations with good will, each side yielding points.
In regard to the comment which has been made by the hon. Member for Wednesbury (Mr. S. N. Evans) and others this afternoon with regard to dollars, I should point out that it is relevant to bear in mind that all of this steel is eligible for reimbursement out of the 300 million dollars provided by the United States Government in support of the defence effort of the United Kingdom. That is a very important point.
My hon. Friend the Member for Burton (Mr. Colegate) the other day asked me to state what amount or types of steel would make up the one million tons. I think other hon. Members were also interested in this point. The answer is that it will be made up of scrap, pig iron, ingots, semi-finished steel forms such as hot rolled coil, cold rolled sheet, wire rods, bars, tube strip and alloy steel. Some of this iron—scrap, pig iron and ingots—will go some way to help give employment in the constituency of the hon. Member for Rotherham (Mr. Jack Jones), and I felt that he was being a little ungrateful in looking this particular gift horse of steel in the mouth.
§ Mr. C. R. Hobson (Keighley)
Are certain specific alloy steels prohibited from inclusion in the steel which is received from the United States?
§ Dr. Stross
The Minister has used, I think rather loosely, the expression "looking a gift horse in the mouth." It was a thoughtless remark to make about a commercial transaction when many of us on this side of the Committee, and the other side, too, think that we have not necessarily had a very good bargain in commercial terms. Could the hon. Gentleman tell us what would be the difference in price between scrap iron which is now being transhipped and the price which would have been paid had it lain, for example, in Germany and then had been bought by us?
§ Mr. Hopkinson
Under the agreement a proportion of this scrap is coming here to this country direct—scrap iron and pig iron. I do not think that was quite understood.
§ Mr. Jack Jones
Perhaps I might intervene, since the hon. Gentleman has referred to me. I am not at all ungrateful. The point I was making was this. This block tin earns x dollars. Those x dollars would have been far better employed in buying raw materials which could easily have been brought to this country, rather than transhipping this material all the way to America, converting it to steel in the types mentioned, bringing it all the way back to this country where it is made into bicycles and motorcars, and then sending these articles back to America. It would have been far better to spend less dollars and gain more materials. If they are available to America, they could have been made available to us so that we could have put our people to work, and we could have got the conversion value of millions of dollars out of it.
§ Mr. Hopkinson
I was not intending to suggest that this was a gift horse in the sense that it was not a commercial transaction. Of course, it is. But I have referred previously to the fact that it is eligible for payment out of the aid to our defence structure. The hon. Gentleman will be aware that in the agreement itself there is provision for 750,000 tons of ore to be diverted to this country which would otherwise have gone to the United States.
§ Mr. Jones
It is not that portion of the deal that I am talking about. I am referring to that portion of the deal which provides that the conversion value accrues to America after the steel has been carted thousands of miles from the other side of the world to America and is then sent back here again to be converted into articles which are exported back to America. It is a crazy arrangement.
§ Mr. Hopkinson
The original expectation was that 200,000 tons would be scrap and pig iron and 800,000 tons would be steel. There may be less scrap and pig iron and more steel when all the contracts have been placed. It is impossible to say exactly what proportions of the types of steel making up the 800,000 tons will be bought, since contracts for nearly half the steel involved have yet to be placed. Furthermore, the types of steel to be contracted for cannot be determined, first, until the American authorities have decided our allocations for the third and fourth quarters of the year, secondly, until we know 2355 what types of steel will be available in American mills, and thirdly, until we we know how the changing pattern of our own home demand may affect our need of particular types.
The hon. Member for Islington, North (Mr. Fienburgh), suggested the other day that we should be at a disadvantage because the types and forms of steel which we shall obtain would be selected by the Americans and might not fit in with our industrial programme. I can assure the hon. Gentleman and other hon. Members that they need have no such fears. A schedule of our requirements is given to the Americans in respect of each quarter. The types of steel to be supplied are then settled in the light of that schedule and of American availability. This is done by friendly discussion and argument, and we are taking nothing that we do not want.
Reference was also made to the report that an increase of £1 to £1 10s. a ton in the selling price of steel in the United Kingdom might result from the import of high priced American steel. I would refer the Committee to the reply given by my right hon. Friend the Minister of Supply to a question put to him by the right hon. Member for Vauxhall on 25th February.
Some of my remarks have already covered many of the points which have been raised this afternoon, but I should like to refer to the question of our existing stocks and the effect upon them of withdrawals or sales. I should like to tell the hon. Member for Coventry, North, that, first of all, his figure is not accurate; neither can I deal with the implications of his remarks. We could not give actual figures of deliveries from stock because, as has already been mentioned by one of my hon. Friends, it would be contrary to the public interest to do so. But what we did, in so far as we have drawn on stocks, was done in order to get tin moving quickly and to get our dollars as quickly as we could. We are quite confident that we are not in any way endangering supplies to United Kingdom industry as a result.
As to the question of tin plate, which was raised by several hon. Members, I do not think it would be for me to try to go into the question of allocations of 2356 steel or tin plate, but I would say that, so far as I know, there is no shortage of tin as such in this country, and the cause of the shortage of tin plate is not a shortage of tin. It is a question of a shortage of steel and of tin plate-making machinery. If we can get the steel, which we shall get as a result of this deal, I hope we shall get some further acceleration of production of tin plate in this country.
The hon. Member also referred to the possibility of getting together with the United States with a view to some sort of pooling of stocks. I appreciate very much the interest that he has always taken in the working of the International Materials Conference. Other hon. Members also referred to it. I would only say that I still believe that the right way to deal with these questions is to face them and examine them, and see where we can achieve agreement with the Americans.
My hon. Friend the Member for Heeley (Mr. P. Roberts) referred to the shipment of tin to the Iron Curtain countries. I think I should point out that that shipment was made entirely on private account and was nothing whatever to do with the Government. Not only can I not give him particulars but, if I were in a position to do so, I do not know that I should be in order.
I do regret the tendency which has appeared in some speeches to describe this agreement as subsidising the American businessman. I can assure the Committee that it is nothing of the kind.
§ Mr. Hopkinson
This deal has been concluded for very good reasons—to get us additional steel which is needed most urgently, to break this log jam in regard to tin, to improve our commercial relations with the United States and, in short, to make available to both of us things which we mutually require.
§ Mr. Edward Davies
Is the hon. Gentleman saying that no progress is being made towards the solution of this problem, namely, the accessibility to all of us of these scarce commodities, by some common agreement. He has agreed with that arrangement. Is there not some continuing conference which is going to iron out these terrific fluctuations which injure our economy and the defence programme?
§ Mr. Hopkinson
Yes. I thought I had made that clear. The question is being examined by the International Materials Conference all the time. We are very ably represented by Lord Knollys, who has a remarkable position among his colleagues, both American and others, on the Conference, and I have no doubt that they have all these problems in mind. Results are being achieved, including the stabilisation of prices as an effect of the allocations over the whole field.
I hope that in view of the value to this country of this agreement, including the agreement on tin, the Committee will accept this Estimate this afternoon.
§ 5.13 p.m.
§ Mr. G. R. Strauss (Lambeth, Vauxhall)
I am sure the Committee—certainly we on this side—are grateful to the Minister for his full explanation and for clearing up some points which were in doubt. I think we know a great deal more about this agreement now.
Before we pass on to the next item of our business there are one or two comments I should like to make and one question which I should like to ask. The first comment is that the Minister really cannot get away with it when he says that bulk purchase does not come into this affair at all. It is a political point, it is true, but it is quite ridiculous to say that.
We are selling to the United States Government 20,000 tons of tin this year at a fixed price, and buying that tin where and as we can, and at such a price as we can. We are acting in this matter not as agents but as principals, and selling to the United States what we are buying in other markets. Of course it is bulk purchase—in the same way as is the purchase of steel from the United States. Although it is not bought by the Government but by the steel industry this is an arrangement made by the Government—
§ Mr. Strauss
By the Prime Minister. Some hon. Gentlemen who are now Ministers have made speeches on previous occasions objecting to the Government negotiating a commercial agreement. They said that that was the feature they disliked most about bulk purchase, and yet all these features of bulk purchase exist in this agreement. We, on this side 2358 of the House, do not object at all. We think it is necessary, inevitable and desirable. But we must comment, that in this case, as in so many others, the Conservative Government are going back on their word by indulging in this bulk purchase, and they are acting contrary to the policy that they enunciated at Election time.
The other point is that we have been told—and this was news to me, at any rate—that as all the tin which is to be shipped to the United States is sold f.o.b., the United States Government can nominate the boat on which the tin is to be shipped. In fact the United States have nominated, and presumably will continue to nominate, only American ships, so that all the metal going to the United States will sail in United States boats.
§ Mr. J. Grimston
I made this point. I did not say it was going only in United States ships. I believe one shipment went in British ships.
§ Mr. Strauss
The Minister, when I interrupted him and made my inquiry, said that the United States Government had nominated, in each case—
§ Mr. Strauss
In most cases. I am glad to hear that. What is the position with regard to the steel we are buying from the United States I am not sure of the terms and conditions upon which that steel is being bought. It is not stated in the agreement. I am not clear whether it is bought f.o.b. American ports, or c.i.f. I want to know whether that steel will come in American ships. Will the United States Government be in a position to nominate the ships that will bring that steel across the Atlantic, or will that be open, as a normal commercial transaction. I appreciate the fact that the hon. Gentleman does not know the answer at the moment, but if it is a fact that this steel can only come in boats nominated by the American Government—
§ The Parliamentary Secretary to the Ministry of Supply (Mr. A. R. W. Low)
§ Mr. Hopkinson
As I thought, the position is that it is bought ex-mill in the United States, and we can ship it as we like.
§ Mr. Strauss
I am glad we have cleared up that point, because it did cross my mind, and I think the minds of some of my hon. Friends, that this would have been a very undesirable agreement if we were bound in any way as to the shipping which was to transfer this steel across the Atlantic.
I still feel that it is unfortunate that our tin shipped to the United States is to be confined, in respect of a large part of it, to American boats; but in a commercial transaction, where the buyer buys f.o.b., he is normally entitled to say what ship shall carry the goods and, as in this case it is the American Government, it is not surprising that they should nominate their own ships. I do not think that one can object to that in principle, but I think it has some regrettable features. Our attitude towards the Supplementary Estimate and the agreement on which it is based is that we want the steel badly. We must have it. The United States require tin and we also need to sell tin to the United States in substantial quantities; it is one of our best dollar earners. The United States also want aluminium and, owing to the foresight of the last Government—which was graciously acknowledged by the Minister—we are supplying it. We are pretty tight in regard to aluminium but we are not as tight as the United States.
It is obviously to the advantage of this country and the United States that there should be an exchange of these metals, and we agree with the principle that where materials are short they should be allocated between us to our mutual advantage. It is on this principle that this agreement is based, and we do not 2360 disapprove of it. On the contrary, we think it is right, and that it will bring advantages to both countries; but, as I said the other day and as many of my hon. Friends have said today, we do not like some of the features of this agreement at all. We think that some of the features are inequitable.
We are told that this agreement was reached by the normal process of bargaining and we won on some points and the United States on others. That may be so, but it is our job in this House to voice criticisms or doubts about agreements entered into by Her Majesty's Government—when we think those agreements have faulty clauses or are unfair in any way—in order to strengthen the Government on the next occasion, so that in future agreements these inequitable or bad features will be eliminated and the Minister will be able to tell the foreign Government that he cannot get away with such proposals because the House of Commons will not stand for it.
Therefore, I say to the Minister and the Government that while we agree with the agreement and the Supplementary Estimate, we think some of its features are bad. We hope that in any future agreement of this sort—and we hope there will be many, because we think this is a wise way of conducting international economic affairs, especially in periods of shortage—that the points which have been made by my hon. Friend and myself suggesting that parts of the agreement are not wise but contrary to the best interests of the country, will be taken note of and not repeated.
§ Question put, and agreed to.
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.