Ministry of Materials (Trading Services and Assistance to Industry) (Hansard, 26 January 1953)

§ The Minister of Materials (Sir Arthur Salter)
We are asking for an extra sum of £33 million, as compared with the mere token £10 727 in the Estimate. I have, however, to explain rather more than this, because we had anticipated not only that we should not have to ask for money in respect of this Vote beyond the mere £10, but that we should have a cash surplus amounting to £14 million which would have been surrendered to the Exchequer. There is, therefore, a difference of some £47 million between the anticipations in the Estimate and the position as we now see it.

§ Sir H. Williams
On a point of order. Are we discussing Class IX, Vote 5, or Votes 5 and 6 together?

§ The Chairman
We are discussing Class IX, Vote 6, Ministry of Materials.

§ Mr. Nabarro
There are three Ministry of Materials Votes on the Order Paper. Are we discussing all three separately or together?

§ Sir A. Salter
It is only the first that we are now discussing. Later, I shall be moving the other two Votes.

§ Mr. Stokes
The one that is being discussed is the second on the Order Paper.

§ Sir A. Salter
We are discussing Vote 6, the Trading Services Vote.

§ Sir H. Williams
Are we going to take Vote 5?

§ Sir A. Salter
Later on; the order has been changed.
The Committee will realise that the sum now needed is not the measure of a trading loss, but the expected excess of cash payments over receipts, payments of over £284 million as compared with receipts of over £252 million. These are net figures reflecting trading losses and some increase in stocks, both of which increase the sums required, and some trading gains and reduction of stocks, both of which reduce the Supplementary Estimate.
By far the biggest factor is that of trading losses, which, as is shown on page 20, are now estimated for the year to amount to £42.6 million. That figure, of course, is not directly related to this Supplementary Estimate, because it includes a writing down of stocks at the end of the financial year, which is only a paper transaction, and does not involve any cash of the kind for which I am now asking. 728 The reason for the considerable Supplementary Estimate is partly—mainly, indeed—the same facts which are reflected in the loss shown in the trading accounts and partly an increase in stocks.
It may be said that two-thirds of the difference of £47 million—the difference between what we had anticipated and what we now anticipate—is represented by trading losses, and about one-third by the fact that we hold increased stocks. Why, then, having expected no trading losses in this financial year, are losses of this magnitude now being experienced? The answer, in a word, is that since the Estimate, world prices of most of the materials in the public trading stocks have been falling and that, granting the policy adopted on sales, periods of falling prices inevitably mean losses, just as a period of rising prices means gains.
It has, with minor exceptions and variations, been the policy both of the present Government and of its predecessor to make materials available to British industry at prices closely approximating to current world prices. If prices were lower when the materials were acquired, gains result, but these are surrendered to the Exchequer at the end of the year and not carried forward. If prices were higher losses result and if losses are incurred Supplementary Estimates are inevitable unless the Estimates are to be based on a speculative anticipation of a fall.
I am sure that the right hon. Member for Ipswich (Mr. Stokes) will agree that there is in these circumstances no presumption of better skill or judgment in periods of profit than in periods of losses. I may go a little further and say that, granted the purposes of public trading and the principles of policy which determine its continuation or determination, losses, in the long run, are inevitable. They represent the cost of public service rendered in ensuring a sufficiency of supplies at difficult periods. It follows from that that the State buys when supplies are scarce, and, therefore, dear, and sells when supplies are ample, and therefore cheap.

§ Mr. Osborne
Why should it do that?

§ Sir A. Salter
Quite obviously, because the reason we go into public trading is to see that when materials are scarce and difficult to obtain, and, therefore, dear, the industry of the country shall be 729 assured the materials. That is an expensive process, but when, on the contrary, a particular commodity becomes in ample supply, its price tends to fall and we say then is the time to get out of public trading and we sell off, and, naturally, at lower prices.

§ Mr. Osborne
Is it the policy that public funds are to be used to protect private enterprise from losses on world price fluctuations? If so, it is an extraordinary gospel.

§ Sir A. Salter
That, in fact, has been the effect of the policy pursued both by this Government and by the previous Government during the period of particularly difficult conditions in the supply of essential raw materials for this country. We know that is the right policy but you would tell me, Sir Charles, that this is not the time to discuss whether it is the right policy. But, granted that policy, trading services of this kind must in time lose money.

§ Mr. Frederick Elwyn Jones (West Ham, South)
For the enlightenment of the hon. Member for Louth (Mr. Osborne), could the right hon. Gentleman give an indication of the type of materials presumably purchased for the public interest?

§ Sir A. Salter
My hon. Friend will see what they are if he will look at the Estimate; he will see them set out in detail. Obviously, a business concern which, when it makes a gain has to surrender not only a fairly high proportion of the gains which the ordinary business has to surrender to the Treasury but 100 per cent. and has also to buy when things are dear and sell when they are cheap, must incur losses.

§ Mr. A. G. Bottomley (Rochester and Chatham)
When goods are in short supply is it not better to buy in bulk?

§ Mr. Nabarro
No.

§ Mr. Bottomley
The facts speak for themselves. By bulk buying we were able to get the goods cheaper than private enterprise. The quarrel which private enterprise has with that is that they want to make the purchases all the time notwithstanding the cost to the country.

§ Sir A. Salter
I am not dissenting from the contention that in a period of very difficult and precarious supplies there 730 have been advantages in public trading. If the Government were not of that opinion they would not be continuing the measure of public trading which they are continuing at the moment.
The Committee will realise that the significance of Supplementary Estimates for a trading Department of this kind is completely different from the significance of similar Supplementary Estimates for an ordinary spending Department. In the latter case, there is always a strong presumption that there has been a big expansion, whereas, in fact, the basic cause of the Supplementary Estimate for which I am now asking is, on the contrary, that there has been a great contraction in the money value, in the turnover of our money stocks, and the contraction in sales has been greater than the contraction in purchases. That is the big reason for this Supplementary Estimate.
I do not know whether the Committee would wish me at this stage, or at a later stage, to answer questions about particular stocks. By far the most important stocks involved, which explain the total of this Supplementary Estimate, are copper, lead, zinc and timber. Perhaps the Committee would prefer that I should not go at length into details relating to each of them, but I am prepared to say something on each, or indeed on any of the others, if any hon. Member is particularly interested. I think the right hon. Gentleman will agree that that represents the main cause of Supplementary Estimates being inevitably required in a period of falling prices.

§ Mr. Stokes
I am not really very clear on one or two things the Minister has said. May I begin by offering him my congratulations on being the first pure Minister of Materials. I was not only Minister of Materials but Lord Privy Seal. This is the first occasion on which the appointment has been that of Minister of Materials only.
These figures do not mean a thing unless we know what the stocks are and I want to ask one or two questions about that. If we follow the line of argument of the right hon. Gentleman the figures become immediately contradictory. He said, for instance, if I understood him correctly, that when prices of world commodities fall losses are made and when prices rise profits follow, but that is precisely what has not happened. If we 731 take aluminium and copper we find that both greatly appreciated in value in the last 12 months. Yet we are being asked for £14 million more for copper and £6 million more for aluminium. That is probably explained by the stocks, but it makes nonsense of this the printed Supplementary Estimates. I do hope that when we have Supplementary Estimates next year we shall have some indication of the stocks.

§ Mr. Nabarro
We hope that next year there will not be any more.

§ Mr. Stokes
I should have thought that a hope that would not be met because trade is always uncertain and the Government are perfectly right to stock up in scarce materials. They have to stock up and keep industry going.

§ Captain Duncan
Would the right hon. Gentleman agree that if the Government believed in stocking up it should be done on Class IX, Vote 17?

§ Mr. Stokes
That is strategic stock. But strategic stock is for emergency reasons and is not current trade. I shall have something to say about that when we get to that Vote.
In the meantime, I presume that where the Estimates show a debit it means increased stocks over what was expected and where they show a credit it is because they are now off public account and the stocks have been sold. Generally speaking, is that so?

§ Sir A. Salter
Several factors are operating in regard to each of these things. As the right hon. Gentleman said, we cannot infer from the actual accounts how much is due to one cause and how much to another. In the case of copper, for example, we have considerably more copper and that represents the greater part of the debit. It does not represent any loss to the country at all; we have had full value for the cash involved. The cash for which we are asking is a little less than it would otherwise be, because in the period during which copper has risen in price we have made some small profits. That is the explanation in that case. The precise play of the different factors in the end result varies with the commodity concerned.

§ Mr. Stokes
I wish that either in the OFFICIAL REPORT or in a supplementary White Paper we could be given the beginning and end stocks so as to give us a better picture. I find it impossible to make what I call a sensible speech on the figures before me. There are too many unknown Xs; indeed, there are very often X, Y and Z, which make it impossible to make any sensible contribution to our discussion.
In the case of zinc, a debit of £16 million is shown. The price of zinc has fallen from £175 last year to £88 this year; whereas in the case of lead, in which a credit of £15 million is shown the price has dropped from £190 to £175. I suppose that has to do with the change of the quantity of stocks, but, again, it is impossible for the Committee to criticise or even to ask considered questions.

§ Sir A. Salter
That instance very well illustrates, as the right hon. Gentleman says, the difficulty of explaining and discussing these questions. To take the case of lead, we ended public trading in that commodity several months ago. We disposed of considerable stocks and the proceeds reduce the amount of cash which we should otherwise need. We ended public trading in zinc only on the first of this month, and, consequently, we hold and shall continue to hold considerable stocks of zinc, the disposal of which may ease the cash position next year, but not this year.

§ Mr. Stokes
It is the time lag in trade?

§ Sir A. Salter
Yes.

§ Mr. Stokes
I am very much obliged to the right hon. Gentleman.
The next point I wish to make is about timber. We changed over from public trading to trading on private account some time ago. In the Supplementary Estimate there is shown a debit of £9.9 million. Examining the stock position, we find that we have at present 667,000 standards compared with 504,000 standards at the corresponding period in 1951. On top of that is the fact that we are told that we have a much increased housing output. I shall not discuss housing on this occasion, but I wish to ask the Minister whether these are genuine stocks or 733 whether they are the total stocks at, so to speak, ports of arrival, and that the pipeline between the ports of arrival and industry are virtually empty. Is that what has happaned?

§ Sir A. Salter
Perhaps it would be more convenient if I answered all the questions together.

§ Mr. Stokes
Yes, perhaps it would be better if the Minister did so.
This is a point about which I should like to be clear, as it seems to me to be extraordinary, the position being what it is. There has not been a great price fluctuation; in 1951 the price ranged between approximately £70 and £80 per standard and in 1952 it went from £70 to £68 and then went up to £75. The figures before us seem to be entirely due to an increase in stocks. Can the Minister say whether there has been a hold-up in distribution or is there total increase in the supply of timber in the country?
I have not much to say about the increases in respect of copper, aluminium and tungsten ore beyond what I said in my opening remarks, following upon what the Minister said about losses being made when prices fell and profits resulting when prices rose. Here we have two instances in which the price has risen, but there have been losses. Therefore, it must be a question of stocks again, and we get into a muddle in trying to deal with the figures.
That is really all I can say appropriately on this part of the Vote. I suppose that generalisations must come on that part of it dealing with the Minister's salary.
I wish to make one observation about Subhead F, on page 19, which deals with the Volta River project.

§ The Chairman
The general discussion should take place now.

§ Mr. Stokes
Then I must almost begin again, as I wish to make some general observations about what is going on.

§ The Chairman
I think that on this Vote it would be best if questions of policy were raised. It will be easier for that to be done now instead of on a rather narrower Vote.

§ Mr. Stokes
That advice, Sir Charles, makes it easier for me; it does not interfere with what I wish to say.
We who are interested in the question of aluminium production know what a tremendous effect the Volta River project would have on our dollar problem. When I was at the Ministry of Materials I took some official interest in the project. I should like the Minister to tell me later just what we may expect about the progress of this project. The Supplementary Estimate talks largely about the grant-in-aid for this great project, etc., but are the Government really getting on with the job? Can we have some indication of when work will start and be completed and when aluminium will begin to arrive from that great scheme?
Turning to tungsten ore, we are being asked to vote £3,500,000 more. There again, 1 suppose the reason must be stocks because prices have fallen; it must be partly a question of trading losses, also. The question I wish to ask the Minister is; what is really being done to increase supplies from the sterling area? When I was at the Ministry of Materials we had in a very embryonic stage projects whereby supplies of tungsten ore were to be increased from Uganda. Has anything been done about that? If so, what? I ask these questions because we buy practically all our molybdenum from the United States, which has control of about 90 per cent. of production. As two tons of tungsten replace one ton of molybdenum, it is obvious what could be done if we greatly increased supplies from Uganda.
I wish to ask about sulphur. An extra £3,711,000 is asked for under the heading of "Sulphuric Acid Materials." In that case, the stock position is rather odd, but perhaps I need not go into the details of it. Stocks appear to have risen enormously from September, 1951, to September, 1952–they have about doubled, from 86,000 tons in September, 1951, to 150,000 tons in September, 1952.
Pyrites stocks have increased from 180,000 tons to 415,000 tons. I suppose that that really reflects the fall in the textile trade. Whether that is the reason or not, perhaps the Minister could give us some enlightenment. What has been done to further the conclusion of the 18 pyrites factories contemplated, and in some cases 735 started, which were to increase the supply from 280,000 tons in 1951 to 900,000 tons in 1954?
What is being done to encourage farmers to use less fertilisers and, therefore, less sulphur, and, incidentally, stop poisoning the people's food? That is a subject for an agricultural debate and not for a debate on this Vote, but, clearly, if sulphur imports could be cut down it would make an enormous contribution to our dollar problem.
Then, finally, on this question of alternative supplies there is the case of nickel. As the Minister knows, all our nickel comes from Canada, which is a dollar supply. This does not occur in this list of items, but on the general question, can he say what has been done to encourage the development of the nickel fields of Tanganyika?

§ Mr. Osborne
I wish to ask the Minister one or two questions about the price policy which he is pursuing. He said that the real loss, the difference between these Supplementary Estimates and the original Estimates, amounted to £47 million, of which he said roughly two-thirds were trading losses and one-third represented an increase in stocks. That means that the real trading losses are about £32 million.
He said—and it seemed most extraordinary—that when things were dear we went out of our way as a Government to buy them and knew that we would make a loss; and when they became cheap we rushed to sell them and to make a loss. It seems to me a most extraordinary gospel for anyone on this side of the Committee to propound. I would remind the Minister that two years ago we as a party were criticising the former Government for doing exactly the same thing between 1949 and 1950. We accused the Socialist Chancellor of timing his buying and selling as badly as ever it was possible to do. We said that he let national stocks run down when he ought to have been building them up, and that he built them up when he ought to have been letting them run down. Surely this is not the policy which we were returned to pursue.
To me it is most extraordinary. If I understood the Minister rightly, he said that world prices have been falling in the past 12 months; therefore, he said, losses 736 were inevitable, and the Supplementary Estimate had to be produced. I want to know what policy is being pursued, causing these losses and therefore causing the need for these Supplementary Estimates? I do not ask for the separate prices which have been paid for the commodities purchased. I ask this general question: since it is admitted that our currency has depreciated to about one-third of its pre-war value, are we paying on the whole more than three times what we were paying pre-war for these commodities?
If we are, it seems to me that inevitably we are running into further losses. To my mind buying commodities now for stocking, except for the most vital stocks required for strategic purposes, is a policy of madness. We are buying our raw materials in the face of what must inevitably be an eventual world fall in commodity prices. The Minister's great experience during the war, in co-operating with the American Government in purchasing these types of commodities, enables him to know better than anyone in the Committee—and he will forgive me for reminding him—that world prices are dollar prices. What the Americans pay fixes world prices.
6.45 p.m.
Is there any liaison with the American buying commission, or the American people, in order that we may have a common policy and go into world markets together, and are we working in close co-operation with them? When I was in the United States during the autumn, it was made quite clear to me by a number of American administrators whom I had the privilege of meeting in Washington that, by the end of next year, the intensity of the re-armament drive would be over. That would mean that if the cold war does not expand into a hot war—which nobody wants to see—then re-armament will be on a caretaker basis; the drive will have gone from it, and the urgent need for these commodities will slacken.
That will cause a price fall. The Americans are well aware of that. They can see deflation in the same year, or the next year; some say that by 1955 it is inevitable. Are any plans being made in my right hon. Friend's Ministry, or by the Cabinet, to meet what I consider to be the greatest problem that Western economy will have to face? Are any talks 737 taking place with the Americans on these matters?
If either the cold war ceases altogether, or the Korean war ends, and there is no urgent demand for these raw materials for re-armament, prices will go down tremendously. Are we then to be saddled with still further losses in the next year, or the year after? Are greater Supplementary Estimates to be presented to pay for the losses which will inevitably be incurred? Is any thought being given to this? Is anything being done to make plans against this eventuality?
There is one other point I put to the Minister. If and when our re-armament drive comes to an end, or if happily the tension between East and West were to come to an end and the need for these commodities were not nearly so pressing as it is today, what policy have Her Majesty's Government got for dealing with the stocks for which we are providing the money tonight? Are they to be thrown on to the world markets and thus cause the slump to be even greater? Will the American Government do anything like that? Have talks taken place on this point? If they are thrown on to the market, it will cause an industrial slump such as we have never seen in our history. This is a question to which I would like to have an answer from the Minister.
I conclude with this quotation from last week's "Economist" in support of what I have said. In making his final report to Congress, President Truman was supported by the report of the Council of Economic Advisers, who reviewed the economic situation, and dealt with this very problem. They are hoping, Or some of them think … that private consumption will have to fill the gap when government spending for rearmament begins to fall off, toward the end of next year"; that is, at the end of 1954. We shall have exactly the same problem, and if we go on buying when prices are high, as the Minister said, goodness knows what next year's Supplementary Estimates will come to. Thought should be given to this matter now. We should not wait until we are, as it were, hit on the jaw by economic events. Now is the time to do it. I think I am entitled to ask the Minister whether thought is being given to it.
738 The "Economist" concludes by saying: But this to the advisers, or at least to two of them, means that deflation is on the horizon and that a difficult period is ahead in which fundamental readjustments will be needed. They foresee that in 1955 (which is at present heavily backed as the year when the country will be face to face with a possible depression). … and so on. This affects fundamentally what we are doing tonight. This is, as it were, the future we have to face. Whether or not we have lost £32 million in the past year is something we cannot alter. But we can, by wise planning and wise arrangements now, prevent the loss of ten times that amount next year. I think I am entitled to ask the Minister whether thought is being given to this. Are talks taking place with the Americans? Are we facing the difficulties that must inevitably arise?

§ Mr. Emrys Hughes
I hope that we shall get an answer to the highly relevant questions put by the hon. Member for Louth (Mr. Osborne). Those arguments in the "Economist" were certainly very grave. We wonder what exactly will be the position if, fortunately, the cold war does not develop into a hot war. As the hon. Member for Louth pointed out, and as President Truman said in his Congress Report, if at the end of another year, or perhaps 18 months or two years, we are faced with the fact that the re-armament drive is almost completed and immense stocks of strategic reserves have been built up, then, if the re-armament programme is abandoned, there will be a sudden slump. With a slump comes industrial chaos and, with that, Communism and the conditions which create Communism, against which presumably the strategic reserves were prepared.
The hon. Member for Louth put his finger on a most important point. I should like to have from such an expert as the Minister of Materials, whom we all respect as an economist, some idea of what his policy is likely to be next year or in two years' time. Now that the hon. Member for Louth has raised this specific question, I hope that we shall be given a clear answer.

§ Mr. Nabarro
I share many of the misgivings expressed by my hon. Friend the Member for Louth (Mr. Osborne). If these figures mean anything at all to me it is that the moral and lesson is that 739 the State should get out of trading in these commodities at the earliest possible minute. I do not believe that it is a correct interpretation of the position to say that these losses have been incurred merely as a result of falling world prices. The situation has also arisen because there has not been enough enthusiasm on the part of the State to abandon trading in these commodities.
I do not take the view of the right hon. Gentleman the Member for Ipswich (Mr. Stokes) that it is a legitimate purpose for the State to continue trading in these materials in order to assure raw material supplies to industry. That was, I think, the gravamen of his argument. Let me cite just one example to which he himself referred—timber. There is no physical shortage of timber in the world today. I could leave the shores of this country and buy one million standards of softwood without any trouble at all. It is simply a problem of currency—that is all. But, because there a currency problem, that is, in itself, no justification whatever for the State continuing to incur these losses or in fact, making any further contracts for future years.
Having stated what I conceive to be the general principle that ought to guide our future arrangements in these matters, I want to direct some attention to one specific item on page 18 to which my right hon. Friend the Minister of Materials and the right hon. Gentleman the Member for Ipswich made some reference, and that is timber. It is by far the biggest item shown in the Table. Whereas a credit of £13,336,000 was anticipated in the Estimate, this Supplementary Estimate postulates a further requirement of £9,900,000. In other words, from the extremity of the credit to the extremity of the revised requirement is a sum of no less than £23 million. That is the extent of the revision that is called for.
It is an extraordinary position. I want my right hon. Friend to stop me if I misstate the position in any material regard. Timber comprises four constituent elements from a trading point of view: softwood, hardwood, pitwood or pit props, and plywood. All pit props are bought by the National Coal Board, so they do not come into this Estimate. All hardwood has been free of Ministry of Materials control for several years, and does not 740 come into this Estimate. Therefore, the figures in this Estimate can relate only to softwood and plywood, and that is where the right hon. Gentleman the Member for Ipswich went wrong when he referred to stock figures and assumed that they could readily be converted to so many standards of softwood. He had, with great respect, omitted reference to the consideration of plywood which is covered by this Estimate.

§ Mr. Stokes
Also with great respect, if the hon. Gentleman will have a look at the statistics, he will find that my figures are absolutely correct.

§ Mr. Nabarro
Yes, but where the right hon. Gentleman is inaccurate is that he does not take into account the fact that the figures in the Supplementary Estimate also have to cover plywood, whereas he was referring only to softwood.

§ Mr. Stokes
indicated assent.

§ Mr. Nabarro
This is the extraordinary situation which derives from this Supplementary Estimate. In the case of softwood timber the Government have made this arrangement in the last 12 months. Importers may buy any quantity of softwood they like without a global or aggregate financial limit. Then, having bought the softwood, it is stringently licensed to the consumer. With plywood, on the other hand, there is limitation or restriction on what an importer may buy. He cannot buy any quantity that he likes. When the plywood comes to this country it is sold to the general public and there is no consumer licence limitation. There is a completely free market.
In circumstances like that, how is it possible to make any accurate estimate of what trading profits or losses may be on timber account for 12 months hence? The two constituent elements in this timber account and the method of operating them are in themselves entirely incongruous. The effect on our economy as a whole is, in my opinion, a very dangerous and serious one. We have steel rationing. Timber is an alternative to steel, but nobody putting up a building in industry, nobody requiring timber or steel for any specific purpose, can proceed with any degree of reliability in the knowledge of what future supplies of either will be, because they are not certain whether they will be able to get a licence 741 for timber or a licence for steel. The result is, of course, a great wastage of materials and money.
Exactly the same occurs with softwood and hardwood. For softwood the consumer licensing system is very stringent and rigid. There is no consumer licensing system for hardwood. Therefore, because a consumer cannot get a licence for softwood, he buys hardwood, and the hardwood costs him twice as much, or more, as a softwood. I appeal to my right hon. Friend.
This is most apposite to this Supplementary Estimate. It is absolutely essential in the case of timber and these other commodities that the State abandons trading within the next financial year. Only by handing them back to the commodity markets to operate, and allowing private enterprise firms to purchase the commodities, can we achieve two objects—first, reduce prices; and secondly, prevent in the years ahead a call for an increasing drain on our financial resources of the character that is displayed in this sad and most unfortunate Supplementary Estimate.

§ Mr. Stokes
Am I incorrect in stating that timber is on private account already?

§ Mr. Nabarro
As I endeavoured to explain, softwood timber may be purchased by private importers, but there is stringent consumer licensing which regulates the flow to the market and, therefore, distorts the whole picture of supply and demand.

§ Captain Duncan
My first comment, as an ordinary individual and not an expert, on this Supplementary Estimate is that it is jolly bad estimating. To start with, only about this time last year, a nominal sum of £10 was provided, and yet, some nine or 10 months later, the Department comes back to the House and asks for £32,689,990, and that seems to me to be an astonishing way of doing business. That is not even the total, because, as my right hon. Friend said in his speech, it is shown on page 20 that, on a turnover of £287.5 million, the total trading loss was £42 million. If any private business ran its affairs like that, those concerned would very soon be unable to face their shareholders, and would not only be paying a visit to Carey 742 Street, but would be faced with the complete reconstruction of the company.
I do not pretend to understand these figures any more than the right hon. Gentleman opposite does, because, on these questions of stocks, it really seems to me that my hon. Friend the Member for Kidderminster (Mr. Nabarro) is quite right—the best thing the Government can do is to get out of this business as quickly as they possibly can. There are 16 items listed under Subhead A—"Trading Services (Net)," on page 18, ranging from copper to mica and miscellaneous items. In which of these commodities are the Government continuing to trade? My right hon. Friend said that two-thirds of the total represents losses and one-third increases in stocks, and the note at the bottom of page 18 says: These figures represent (i) the difference between the receipts from sales of raw materials and payments for their purchase by the Ministry, including payments in respect of distribution and other incidental expenses, (ii) the receipts from the sale of stocks of raw materials in which public trading has ceased. There must be an additional part of the total which is not, therefore, in relation either to the two-thirds or the one-third representing the receipts from the sale of stocks of raw materials in which public trading has ceased. I hope the Minister will make it clear that the Government are going out of business in trading in these things in the ordinary course of events.
It may be that there is a case for the Government holding strategic reserves of some scarce materials, and that seems to be the tenor of my right hon. Friend's remarks, but in that case the figures ought to be in Vote 17 and not in this Vote. Some of these items which were bought by the Government for defence purposes ought to have been shown, and ought to be shown in future, in Vote 17 and not in this Vote. The right hon. Gentleman opposite does not agree: he wants the Government to go on in this trade, but I do not. I want the Government to get out of it, and let the ordinary market return, but if for defence reasons there is a necessity to buy and hold stocks, I suggest that in future years they should be shown in Vote 17.

§ Mr. Stokes
I think the hon. and gallant Gentleman has misunderstood what I meant, and I think he has not read the 743 document correctly. Although there may be some of the same materials in Vote 17 they are given as stock in Vote 6 (III).

§ Captain Duncan
I quite agree, but what I am saying is that this ought to disappear in future at the earliest possible moment, but that, if any of these items are regarded as strategic necessities for defence, they should appear in Vote 17 and that Vote 6 should disappear.
I hope that, in the near future, the Estimates Committee will have a look at these figures. They have done sterling work in the past in stirring up Government Departments to action, and this seems to me to be a very useful field in which they can discover the rights and wrongs and the complications of Government finance.
As my right hon. Friend offered to deal with any items that are in the list, I shall be very glad if he will deal with these and tell us something more about timber and jute, which I do not pretend to understand. Here is a case of an estimated credit in the original Estimate of £2 million. The price of jute has gone down by half, and yet this estimated credit is now £4 million. In fact, what has happened is that the British taxpayer has had to pay the difference between the price at which the jute was bought and the price at which it was sold, largely because of the fiscal action of the Governments of India and Pakistan.
My right hon. Friend the Minister of Food said not long ago that he hoped to be the last Minister of Food. I hope my right hon. Friend will make a similar statement—that he will be the last Minister of Materials.

§ Sir A. Salter
I am afraid that a great deal of ground has been covered, and I am not sure that I shall be able to deal adequately with every point that has been raised.
I should like to deal with the point of principle raised by my hon. Friend the Member for Kidderminster (Mr. Nabarro) and my hon. and gallant Friend the Member for Angus, South (Captain Duncan). Certainly, we want to get out of public trading in these materials. Our position is that there should be private trading in them, except where and when there is a decisive temporary reason for public 744 trading. That reason may be, as it has sometimes been, exceptionally short, scarce and precarious supplies of essential materials for our own industries, or in some cases there has been a currency problem, as in the case of softwoods. Our policy and purpose is to get out where we can.
My hon. and gallant Friend the Member for Angus, South asked me which of these materials we are going to leave to the private market. Well, in the last few months we have left lead and zinc. Granted that there is a decisive reason which will, in some cases, remain for public buying when things are scarce and therefore dear, it will necessarily result—and this is what I meant when I was talking about buying dear and selling cheap—it will necessarily result, as a consequence of that policy and purpose, that when we do get out, because supplies are ample and cheap, we are not able to get as high a price as we had to pay when, because of the dangerous condition of supplies to British industry, we had to buy in a period of scarcity and difficulty.

§ Mr. Osborne
Assuming that the nation requires a given quantity of materials and that there is a world shortage, is my right hon. Friend saying to this Committee that he believes that a Government can buy cheaper than private people? It is an astonishing suggestion.

§ Sir A. Salter
I am not making any general statement for all time. For a few years there have been instances—and I think anyone who is concerned with an industry requiring raw materials will agree—when, in the particular circumstances of the time, it was advantageous for the Government to intervene in the acquisition of the supplies in question. I will not expand the point at this moment; undoubtedly, there have been such cases, and that is what I meant. If one is emerging from a period during which that was thought to be necessary and is getting back to private trading as quickly as possible, it will be found that one is getting out at a time when prices are lower than they were when the stocks were acquired.
That is all I propose to say on our general purpose. I am afraid I cannot follow my hon. Friend the Member for Louth (Mr. Osborne) in his question concerning what we should do in a future 745 year if there were a great world depression, a cessation of the cold war, and so on. After all, what I am presenting are Supplementary Estimates for the current financial year, not even the Estimates for 1953–54, and, in those circumstances, whatever may be the discussions we may have with America or other countries, they cannot affect the provisions for this current financial year.
I think that answers the hon. Member for South Ayrshire (Mr. Emrys Hughes) on his wider question, which I shall be very glad to discuss on an appropriate occasion.

§ Mr. Emrys Hughes
Next year.

§ Sir A. Salter
One or two specific questions have been asked about particular commodities. It was pointed out by several hon. Members that the most astonishing item here is, of course, the case of timber. The position about timber is that softwood may now be freely imported, but in order that that should not have an undue result in increasing the non-sterling costs of such imports, it was thought necessary to continue for the time being the restrictions on the actual use of softwoods in this country. That is the purpose, and that is the policy.
It is true that the stocks of softwoods have gone up very considerably compared with our Estimates in March. At that time we anticipated that in the course of this financial year we should get rid of practically all our stocks of timber. But two things have happened. We have had great supplies coming in under contracts made in previous years, the shipment of which was delayed by climatic conditions, and, simultaneously, there has been a slowing down in the demand for supplies in this country.
The right hon. Member for Ipswich (Mr. Stokes) asked me one or two questions about alternative supplies for, I think, tungsten and nickel. He asked why stocks of sulphur had greatly increased. The explanation is partly the one he himself suggested as regards that commodity and pyrites—the textiles depression in this country. As regards the Volta scheme, the right hon. Gentleman will be aware of the White Paper and will know that what is proposed in it is the setting up of a preparatory commission before the main development is under- 746 taken. We are very actively getting on with arrangements for that preparatory commission, and are in constant contact with the Gold Coast Government. I hope we shall soon be able to make an announcement, which I shall be very pleased to see made, if our hopes are realised. As to the time when actual supplies will be coming from the Volta scheme, that is, of course, a long way ahead.
It is true that there has been a considerable increase in the stocks of tungsten this year, which explains the figure. As to Uganda, we have made offers of long-term contracts there which are beginning to have some effect. As regards nickel, I am afraid the Tanganyika arrangement is a little more distant, and that there is nothing that I can usefully say about it at the moment. Pyrites and sulphur are both related to the textile position, and it is true that the increase in supplies of pyrites has taken place partly in order that we might be in a position to continue the process which is relieving our dependence on imported sulphur in the future. I think I have touched on every point of any importance but if I have not, perhaps some hon. Member will ask me a supplementary question.

§ Mr. Stokes
I should like to put two points to the Minister. The first is whether, in the event of there being another Paper like this on a future occasion, he will consider whether some indication can be given with regard to stocks, because that would make it much more understandable. Secondly, may I refer to copper—your predecessor, Mr. Hopkin Morris, was kind enough to interrupt me and make the debate a little more general; he said that was the right moment to do it—because I got my notes muddled and did not put the question to the Minister.
The Minister will be aware that the vast majority of our copper comes from the Rhodesian Copper Belt, and he knows how much that is mixed up with coal from the Wankie colliery in Northern Rhodesia. Will he at an early date make it his job to find out what is happening? I have been there, and I think they are doing it the wrong way. There never was such an opportunity for opencast working, but they insist on going underground. There is a lot of fiddling on 747 price. If the price of coal goes up, so does the price of copper. I hope the right hon. Gentleman will disallow any increase in the price of coal above 13s. 6d. unless they tackle the job properly and do it the right way, by opencast mining.

§ Sir A. Salter
I recognise the difficulty of interpreting these Supplementary Estimates as each item is a net result of several factors operating several ways. I will look into the point. There are certain difficulties relating to what we publish in the Monthly Digest regarding strategic stocks, but I will look into the question. As regards copper, I shall be very glad to have a talk with the right hon. Gentleman. I have begun to study the particular question he mentions, but I would certainly like to study it further.