HC Deb 16 April 1962 vol 658 cc27-9
37. Mr. Nabarro

asked the Minister of Power why he did not exercise his powers under Section 5 (4) of the Iron and Steel Act, 1953, in respect of the steel works at Shotton, in view of the fact that the capital cost of this plant was £3.5 million, that it occupies 200,000 square feet of factory space, that it has an annual capacity of 100,000 tons, was recently completed, and has never been used.

Mr. George

The Iron and Steel Board is satisfied that there is ample capacity at other pipe plants in Great Britain to meet the foreseeable demand for products within the range of the Shotton plant.

Mr. Nabarro

Is it sensible for my right hon. Friend the Minister of Power to sanction and authorise the building of a complicated plant of this kind, worth £3½ million, only to find on its completion that it is surplus, stands idle for a few months and is then sold to an overseas nation? Is not that a disastrous policy?

Mr. George

My right hon. Friend did not authorise, and was not required to authorise, the construction of this plant.

Mr. Nabarro

Who authorised it, then?

Mr. George

The plant was constructed by free enterprise, and it represents the best traditions of free enterprise. This company forecast a demand for its products in the international field. It decided not to await the arrival of that demand but to provide for it in advance. It might have made a profit, it might have made a loss, but it risked its own money. In the end, the demand which it thought would materialise did not come, and it made a loss. I should have thought that my hon. Friend the Member for Kidderminster (Mr. Nabarro) would be delighted to see that this industry is prepared to take great risks with its own money.

Mr. T. Fraser

Is the Parliamentary Secretary aware that we on this side are very disappointed that he did not respond to the excellent suggestion made by the hon. Member for Kidderminster? This is the first time, to my knowledge, that the hon. Gentleman has advocated the nationalisation of part of an industry, which is what would happen if these statutory powers were exercised. Since the steel industry is running so much under capacity, and since a fair number of works are totally idle, like the Shotton works, would not it be better if the Minister and the Parliamentary Secretary said how private enterprise really works in this industry and not merely exercised their powers under Section 5 (4) but proceeded to give the whole lot back to public enterprise so that it might get on with the job?

Mr. George

The hon. Gentleman has failed to notice that we have passed on to Question No. 37.

Mr. Fraser

This Question deals with Section 5 (4).

Mr. George

The initial part of the hon. Gentleman's supplementary question referred to Question No. 36.

Mr. Fraser

No.

Mr. George

I am sure that my hon. Friend the Member for Kidderminster is greatly enlightened by the information which I have given.

Mr. Shinwell

Do I understand from the Parliamentary Secretary that the view which he has expressed is the view of the Government as a whole, namely, that to spend £3½ million under private enterprise is a test of the advantage of private enterprise, even if the money is completely wasted?

Mr. George

Private enterprise is facing its test. It does not only back certainties. It is ready to accept a challenge and to work on a forecast. If it makes a profit, well and good: if it makes a loss, it takes it in the same spirit.

Mr. Nabarro

Is it not a fact that the annual capital investment programme of the British iron and steel industry is authorised each year under the statutes by the Iron and Steel Federation and finally by my right hon. Friend the Minister of Power? In those circumstances, how can my hon. Friend disclaim all responsibility for this state of affairs?

Mr. George

My right hon. Friend would not try to disclaim responsibility for this state of affairs. He does not think there is anything wrong with the state of affairs covered in the Question. [An HON. MEMBER: "The hon. Gentleman said that there was."] I did not say that there was anything wrong at all. Free enterprise in this country must always be prepared to take a chance, as this company did. There is nothing wrong with this state of affairs.

May I try to clarify my hon. Friend's mind? The Iron and Steel Board can refuse consent to a development proposal only if it appears that it would seriously prejudice the efficient and economic development of the steel industry. In 1957, when it was decided that this plant should be erected, it seemed to be a good and worth-while proposition.

Mr. Jack Jones

Is the Parliamentary Secretary aware that the miserable and inadequate answers given by him prove conclusively the lack of policy on the part of the Government to expand exports and to bring about a healthy climate in the steel industry? Is he aware that not only the men but the management are completely fed up and have lost faith with the Government? The sooner they get out the better.

Mr. George

On the contrary. The purpose of building this plant and risking £3½ million was to provide for exports which were anticipated but which, unfortunately, did not materialise.