HC Deb 05 May 1953 vol 515 cc210-3

The following Question stood upon the Order Paper:


TO ask the Minister of Supply how far supplies of steel are now sufficient to meet demand.

The Minister of Supply (Mr. Duncan Sandys)

I will, with permission, answer Question No. 61.

So far as tinplate supplies are concerned, I have nothing at present to add to the full reply I gave to my hon. Friend on 23rd March.

The output of iron and steel in general has been steadily increasing, mainly as the result of the completion of a number of new blast furnaces during recent months. [Interruption.] Blast furnaces. I might add, the construction of which was started long before nationalisation. It is expected that home production of steel in 1953 will be about 17½ million ingot tons. That is about 1.3 million tons more than in 1952.

While there will continue to be some shortage of steel plate, steel supplies as a whole are now considered to be sufficient to meet overall home demands, as well as to provide somewhat larger quantities for export. The satisfactory increase in home production should make it possible to reduce appreciably our imports of foreign steel, but if demand should rise further than is at present expected there should not be much difficulty in purchasing additional steel from abroad.

In the light of this improved position, the Government have reviewed the present controls over distribution. Subject \ to the continuance of the voluntary scheme for the distribution of steel plate which I announced recently, we are satisfied that it is no longer necessary for iron and steel to be rationed.

The Government have accordingly decided, that with the exception of tinplate, statutory control of the distribution of iron and steel shall be brought to an end. I have made the necessary Orders which will take effect as from tomorrow.

Mr. Nabarro

While congratulating my right hon. Friend on this further step on the right road to freedom, may I ask whether he is aware that his statement will be received with acclamation by British industry, notably the engineering industry upon whose future exports our balance of payments position so largely depends?

Mr. G. R. Strauss

Everyone will, of course, be pleased that there is now likely to be sufficient steel to allow the allocation scheme to end, but does the Government not realise that the increased production of home steel, which makes this step necessary, destroys the whole case for their denationalisation Bill and shows that it has no economic but only a doctrinaire justification? Will the Government now take the next logical step of saying that they will not pursue any further this Measure to dislocate this magnificently successful publicly-owned industry?

Hon. Members: Answer.

Mr. Sandys

I thought it was a monologue.

Mr. Strauss

Is it that the right hon. Gentleman cannot answer my question?

Mr. Sandys

I have been answering it for a number of weeks in the debates on the Iron and Steel Bill.

Mr. T. Brown

In view of the statement which the right hon. Gentleman has just made which, no doubt, all welcome, will he explain why it is that in South-West Lancashire, Clarington Forge (English Tools) Limited, of Wigan, which are large manufacturers of tools for abroad, have been short of steel blooms for the last three months?

Mr. Sandys

As I have explained on a number of occasions, there are bound to be shortages of particular types of steel even in normal times. These shortages and difficulties can only be dealt with by detailed administrative arrangements. The maintenance of a general global steel allocation would not in any way assist us to overcome the special difficulties to which the hon. Member referred and of which I am well aware.

Mr. M. Lindsay

Is my right hon. Friend aware that the decision to free steel, iron and copper will be enormously welcome in Birmingham and the Black Country?

Mr. Lee

In coming to this decision, has the right hon. Gentleman taken account of the fact that production in the engineering industry did not go up, as the Chancellor of the Exchequer prophesied last year, and that if it does begin to rise now we may be faced with a shortage of steel for the engineering industry; and whether, under those conditions, he is prepared to keep in reserve some kind of allocation scheme to make quite sure that the most important products get priority?

Mr. Sandys

As I said in reply to the right hon. Gentleman the Member for Ipswich (Mr. Stokes) some time ago, we felt it desirable to make quite sure there was not only enough but a little more than enough before ending rationing. In estimating demand we have assumed an increase of at least 6 per cent. in the consumption of steel by industry this year.

Mr. E. Johnson

May I ask my right hon. Friend whether these very satisfactory figures apply to billets for re-rolling?

Mr. Sandys

I am referring to steel as a whole. Of course, it will cover billets, but there may be special difficulties due to particular types.

Mr. Stokes

While I am glad that the Minister accepts my right hon. Friend's irrefutable argument about the success of the nationalised industry, can he give an assurance that the availability of both basic and acid steel for boiler making— and I am a boiler maker—will become increasingly available in the very near future? At present, it is in short supply.

Mr. Sandys

I hope that when the industry is denationalised, the right hon. Gentleman will get increasing satisfaction.

Lady Tweedsmuir

As far as the voluntary scheme of distribution of steel plate is concerned, is the Minister satisfied that Admiralty authorisation for steel supplies to the shipyards in Scotland will be met, because at present they are not being met?

Mr. Sandys

That is, of course, a separate issue. I made a full statement the other day about the arrangements for the distribution of steel plate. In that statement and in answer to a further question a week later, I made it clear that the Government had asked the steel makers to increase supplies to shipbuilders.

Mr. Popplewell

Is the Minister aware that on the Wear and the Tyne fears are already being expressed by shipbuilders and ship repairers about the shortage of steel that is allocated to them? If this voluntary scheme of allocation is to break down—the statutory control is to come to an end—what action is the Minister taking to ensure that the shipbuilding and ship repairing industries on the Tyne and the Wear will get sufficient quantities to keep them in full production?

Mr. Sandys

As I have already explained in reply to an earlier question, the present system consists of the global allocation of steel. A certain number of tons of steel is allocated to consumers without the type being specified. It would not in any way help the consumers of particular types, such as the shipbuilders, who require special plate for shipbuilding. We are dealing with that in the way in which the right hon. Member for Vaux-hall (Mr. G. R. Strauss) dealt with similar problems when he ended the steel allocation scheme in 1950: that is, by continuing certain detailed administrative arrangements which, I believe, will prove effective.

Mr. Jay

In view of previous experience in steel of rapid changes from surplus to shortage and back again, is the Minister keeping in being the legal powers for an allocation scheme in case it should become necessary?

Mr. Sandys

Nothing would affect the legal powers under the Supplies and Services Act.

Mr. Grenfell

What are the prospects of increasing the demand for tinplate, so that the increasing supply of tinplate for overseas markets may consume any surplus steel which the Minister anticipates? Is the outlook for tinplate as good as the right hon. Gentleman would like it to be?

Mr. Sandys

I did not want to go into the problem of tinplate in reply to this Question. I am, however, having a meeting with representatives of the tinplate industry tomorrow to discuss this very problem.

Several Hon. Members rose-

Mr. Speaker

Order. We must move on with the business of the day.