HC Deb 25 April 1966 vol 727 cc361-3
Mr. Dalyell

(by Private Notice) asked the President of the Board of Trade what action he is taking, in the light of the decision of the Zambian Government announced yesterday, to stabilise the price of copper in the United Kingdom.

The President of the Board of Trade (Mr. Douglas Jay)

The Zambian copper companies announced the day before yesterday that they would temporarily sell their production at the free market price for delivery three months ahead instead of at their earlier controlled price of £336 a ton. The Zambian Government sub- sequently announced the imposition of an export tax to be paid by the Zambian companies.

We have informed the Zambian Government and producers of our concern about price increases; and they are aware that it would be in their long-term interests to avoid increases which would encourage large-scale substitution of other materials for copper.

Today's three months' price on the London Metal Exchange fell to £548 a ton. A further fall would bring it close to the previous average price paid by the British fabricating industry for copper from all sources.

Mr. Dalyell

In view of the possible chain reaction in price rises, is there not a case, perhaps, for a temporary subsidy being considered?

Mr. Jay

I am not convinced that that is so. There are many experts in this industry who think that we may see a fall in prices from the present level over the months ahead.

Mr. Barber

Would the right hon. Gentleman care to comment on the suggestion which has been made that the result of what has just happened in Zambia will be to cost this country £40 million this year and probably about £70 million next year? Will he not agree that one consequence of the decisions taken in Zambia will be to increase the cost to consumers in this country of a wide variety of products—cars, television sets, and so on? This, obviously, is a serious matter, as he said.

Is the right hon. Gentleman aware that it has been suggested that one reason for this has been that copper users have been stocking up in fear that the Zambian source of copper might dry up in the event of conflict between Zambia and Rhodesia? In view of the increased revenue—[HON. MEMBERS: "Too long."]—this is a very important matter—to Zambia as a result of this action taken by the Zambian Government, will the right hon. Gentleman consider asking Zambia to make a contribution to the cost of the air lift of oil which we are at present undertaking?

Mr. Jay

This is, of course, a serious matter for British industry, but, on the whole, I think that the prophecies which the right hon. Gentleman has made are somewhat exaggerated. Experience shows that, when producers push up prices to this level, substitution is encouraged, and, also, production and supplies are increased before very long.

Mr. Emrys Hughes

Has the attention of the President of the Board of Trade been drawn to a statement that the reason for the shortage of copper has been the war in Vietnam? If so, will he consult the Foreign Secretary with a view to making representations to the American Government that they can do something in this respect?

Mr. Jay

That has been one contributory cause, but there have been others, including strikes in both Zambia and Chile.

Mr. Bessell

Does not the President of the Board of Trade agree that this matter emphasises the danger of relying upon imported copper, and will he, therefore, investigate the possibility of seeking copper under the soil of Cornwall and other parts of the country?

Mr. Jay

The Board of Trade has been discussing with the British industries consuming copper the various ways of meeting a possibly high price and shortages of supplies for the whole of the past year. We shall certainly not ignore that possibility.