HC Deb 25 March 1974 vol 871 cc20-3
21. Miss Boothroyd

asked the Secretary of State for Industry what means there are of identifying the country of origin of steel imported into the United Kingdom.

Mr. Meacher

In general, there are no practicable means of identifying the origin of imported steel products once these have been distributed from the port of entry.

Miss Boothroyd

Is my hon. Friend aware of the great concern in the manufacturing industry about British steel, which, having been exported, is then imported and thereby commands the high foreign price, with all the inflationary tendencies which flow from this? Will my hon. Friend consider having talks with the Customs and Excise, or our partners in the Coal and Steel Community or in the EEC, to find a method of identifying steel so that this unscrupulous practice can be stopped?

Mr. Meacher

I am well aware of the concern felt about the problem. We are anxious to receive all possible accurate information of any activities of this kind. I should make it clear, however, that the basic cause of the problem is the substantial price differential between British Steel Corporation prices and continental prices. The BSC is having consultations with the Government about price increases in order to cover rapid increases in cost.

Mr. Ridley

Would not the way to deal with the problem be to abolish the price differential mentioned by the hon. Gentleman and to allow the price of steel to reach its market levels? Does not that apply to a number of other commodities as well?

Mr. Meacher

A reduction in the price differential is certainly to be looked for as a result of the present review. That applies also in the case of other commodities. In the meantime, however, to prevent the situation from getting out of hand we had thought to retain control on all steel exports where such exports might inhibit the recovery of British industry from the trough of the three-day week.

Mr. John Ellis

Is not my hon. Friend aware that this trade is going on—namely, that British steel is going abroad and coming back to this country at inflated prices? Will he at least make use of the necessary control powers, if he possesses them, to prevent this practice?

Mr. Meacher

I have already made perfectly dear that in all cases where there is not an ample supply of steel products no open general licence will be granted. Although there was a reduction in steel licensing on 18th March, protection was retained in all those cases where handicaps were likely to be found in future for British industry.

26. Mr. Spriggs

asked the Secretary of State for Industry whether his attention has been drawn to the price British steel stockists are having to pay to speculators for British Steel Corporation steel; what part his Department plays in the export and import of British steel; whether export and import licences are being issued to facilitate such a situation; and if he will make a statement.

Mr. Benn

I am aware of allegations that British steel has been exported, re-imported and then offered for sale at the higher prices prevailing abroad. However, steel exports are now subject to control. My Department does not control steel imports.

Mr. Spriggs

Is my right hon. Friend aware that this reply and the earlier reply by our hon. Friend will simply not do? British firms are unable to buy British steel and are having to bid for it while it lies in the holds of ships off foreign ports. That steel is being bid for from time to time by customers in this country who are having to pay foreign prices, which are something like 70 per cent. above British prices. In view of the replies already given to my hon. Friends, what is my right hon. Friend prepared to do to protect British firms against the extortionate prices being demanded by people who are investing in British steel with no intentions of using it for industry?

Mr. Benn

I am aware of the facts of which my hon. Friend speaks and I have been given details of the case that I think he has in mind from his constituency. As I understand, the steel in question was not exported by the British Steel Corporation but was sold to another firm in this country which itself may have exported it and the steel may have passed through several hands before being offered to the firm in my hon. Friend's constituency.

As regards the controls, we hope to meet the problem in a practical way by maintaining a control on steel exports until the home market is satisfied. As to the profits made by firms which seek to undertake this undesirable practice, they will fall for control under Price Commission rules about profit margins.

Mr. Bruce-Gardyne

Will not the right hon. Gentleman confirm that the sort of practice to which he refers is the inevitable consequence of the Government's attempt to interfere with the pricing policies of the British Steel Corporation? Will he further confirm that such interventions are strictly against the rules of the Treaty of Paris?

Mr. Benn

The hon. Gentleman must know that the problem we have just been discussing relates to what happened under the previous Government when the differential in prices arose between the British Steel Corporation and other price levels in Europe, and at a time when domestic supplies of steel were short. We believe that the methods I have described will now prevent the problem from arising in the same form in the immediate future, but everyone accepts that this Government have inherited a price differential between British and foreign steel, a problem that was neglected by the previous Government.

Mr. Chataway

Is the right hon. Gentleman saying about steel—and, presumably, about PVC and quite a number of items—that the fault of the previous Government was that they held down prices too much?

Mr. Benn

As the right hon. Gentleman knows, the argument that I am dealing with now is that if there is a need for exports to get the maximum value added in this country, it does not make sense to export raw materials that British manufacturers would like to use and then find that they have to import raw materials at higher prices.

Mr. Spriggs

In view of the unsatisfactory reply, I wish to give notice that I shall raise this matter on the Adjournment at the earliest possible moment.