HC Deb 16 April 1962 vol 658 cc25-7
36. Mr. Nabarro

asked the Minister of Power what was the aggregate output in millions of ingot tons of the British steel industry in 1961; what is the estimated maximum capacity in millions of ingot tons for 1962; at what level per-centum, of maximum capacity, the industry is currently operating; what is the spare annual capacity in millions of ingot tons and value; and what steps he is taking to restore maximum capacity operations in the industry.

The Parliamentary Secretary to the Ministry of Power (Mr. J. C. George)

Total output of crude steel was 22 million ingot tons in 1961; maximum capacity in 1962 is estimated at 28 million ingot tons. The industry is currently operating at about 77 per cent. of maximum capacity. Spare capacity amounts to about 7 million ingot tons. In theory this could produce finished products worth about £280 million if the demand were there: in practice the optimum level for the industry's operations is well below its theoretical maximum capacity. Production should rise when the current rundown of consumers' stocks comes to an end, but basically the fortunes of the industry will depend upon the state of the economy and of world trade in general.

Mr. Nabarro

Is not this ample support for my earlier statement that deflation since last July has proceeded much too far? Can we really contemplate a state of affairs in which something of the order of £250 million worth of steel capacity annually remains standing and unused? Will my hon. Friend represent these figures urgently to the Chancellor of the Exchequer?

Mr. George

I ask my hon. Friend not to be deceived by the figure of £280 million. That was for maximum capacity. In fact, the industry, even at boom times, has not operated at maximum capacity. The industry's view is that 90 per cent. is optimum capacity. On this basis, spare capacity amounts to about 4½ million ingot tons, which could produce £180 million worth of steel, instead of 7 million ingot tons.

Dr. King

Cannot the Minister take a leaf out of President Kennedy's book and get the steel barons to charge less and produce more steel instead of producing less and charging more?

Mr. George

My right hon. Friend is confident that the steel industry is an efficiently managed industry and is well able to meet any upsurge in the economy which we expect in the near future.

Mr. Nabarro

Whether the figure is £180 million or £280 million, or whether it is the mean of those two figures, would not my hon. Friend agree that this is a huge sum of money, representing lost production which we should be productively employing?

Mr. George

It is absolutely true that the position of steel at the moment is at a low ebb. What my right hon. Friend is concerned about is that this industry should be ready, as it will be, to take advantage of any upsurge in the economy.

Mr. Callaghan

How far is this industry contributing to exports and how far can it contribute to extra exports? Or does the Parliamentary Secretary take the view that there is no margin for exports in this sphere? Is it not the case that the Chancellor of the Exchequer says that we cannot have home expansion until exports increase? Will the Parliamentary Secretary represent the position to the Chancellor of the Exchequer and ask him what he proposes to do to stimulate exports of steel?

Mr. George

That is a totally different question. The industry does, of course, contribute to exports. I am prepared to answer a question asking for the tonnage exported if the hon. Gentleman tables one. I repeat that my right hon. Friend is satisfied that this industry is in a position to meet any upsurge of demand, national or international.

Mr. Callaghan rose

—

The Speaker

Order. We should get on. We have spent rather a long time on this Question.