Rubber Control.

Emergency Powers (Defence) Act, 1939. – in the House of Commons on 3rd February 1942.

Alert me about debates like this

Motion made, and Question proposed, "That this House do now adjourn."—[Major Dugdale.]

Photo of Mr John Parker Mr John Parker , Romford

I wish to raise the whole question of the policy and personnel of the Rubber Control and to ask the House definitely whether they consider that this form of organisation of an industry is, at present, in the public interest. Personally, I have no financial interest in the industry, nor have I any special technical knowledge about it. I think that, in considering the British rubber industry, one ought first to compare it with that in other industrial countries, especially if one is to judge at all accurately the work that has been done by the Rubber Control. Comparing the British with the American rubber industry, taking the figures of consumption of both crude and reclaimed rubber and taking the increase in the years immediately before the war, between 1932 and 1939 in England we find that the increase in consumption was 59 per cent. and in America 90 per cent. That big increase in both countries was due, partly to the rapid growth of the motor-car industry, but also to increased consumption of rubber in such goods as hot-water bottles, toys and so on. Taking the increase in crude rubber consumption alone, in Great Britain it was 56 per cent. and in America 83 per cent. In this country in that period the consumption of reclaimed rubber only grew from 5,000 to about 10,000 tons, whereas, in the United States during the same period, the growth was from 77,500 to 170,000 tons. If you take the immediate pre-war position and look at it rather differently, the position with regard to the consumption of reclaimed rubber was as follows: In this country, comparing the consumption of reclaimed with crude rubber, we only consumed 7 per cent., whereas in America the figure was 38 per cent. At the beginning of the war plant was under construction which would bring the American figure up to 55 per cent.

Comparing ourselves with Germany, the position again is very, different. Before Hitler came to power the consumption of reclaimed rubber in Germany was very small indeed, but as soon as he came to power there was a very rapid increase, both by collecting carefully all scrap inside the country and also by importing very cheaply vast quantities of waste rubber from other countries. With regard to the collection of scrap rubber inside Germany, a careful inventory was prepared of where there were supplies, and care was taken to see that storage took place. It was stored in small quanties in fairly safe areas. We can be certain that since the beginning of the war there has been no waste of scrap rubber in Germany. With regard to Russia, the latest figures I have been able to get are for 1933, and already by that date the figure of consumption of reclaimed rubber compared with crude rubber was 50 per cent., and it has since been rapidly increased. An interesting point worth realising is that the machinery for reclaiming rubber used in Russia was largely obtained in this country, which shows that we are capable of making the machinery for the reclaiming industry.

I would like to say a word about synthetic rubber. America, Germany and Russia have begun to develop this industry, and it has already reached a considerable size; but in this country it is still very much in the experimental stage. In Germany so far has the development of synthetic rubber and the use of reclaimed rubber gone, that in 1938 the German Government were able to issue an order that all bicycle tyres should be made of synthetic rubber. The same order stated that all carcases must be made from reclaimed rubber. With regard to retreading, in this country, in contrast to the reclaiming and synthetic rubber industries, there was a certain measure of development in the years before the war, but even in this field this country was behind the other leading industrial countries. In America between 1929 and 1940 the number of tyres reconditioned increased six times. That is a big increase and much bigger than the increase in the size of the motor car industry in that period.

Why was there such a snail increase in this country in the reclaiming, synthetic rubber and retreading industries compared with other leading industrial countries? As far as I can make out the position, it was due to the following facts. The new tyre manufacturers in this country were not, on the whole, keen about this development. They had to come into the retreading industry when they saw that it showed signs of growing and of becoming a possible rival. Then we found the big tyre companies either creating subsidiaries or obtaining interests in existing firms. It is widely believed, for example, that in these years Dunlop interested themselves in Marshams, the firm that owned Regent Tyre Rebuilders. Before the war the big tyre manufacturers considered creating a joint retreading company, with the object of collecting all possible casings and thereby putting all other retreading firms out of business. The war prevented that scheme being carried out.

It is not widely known that most of the big public service concerns, such as the London Transport Board, used retreaded tyres on a large scale. The London Transport Board hire tyres. They do not own them. They hire them from the big tyre companies on a mileage basis. Coming to the House to-day the bus on which I was travelling skidded and all the passengers commented on this fact. The reason was that it was such an unusual thing for a London bus to skid. That is because, first, there is a very high efficiency standard for public service vehicles which is, very rightly, maintained by the Ministry of Transport. That very high safety standard is maintained in spite of the fact that the London Transport Board systematically has the tyres of its vehicles retreaded, and in that way makes the fullest use of them. I should like to ask why it is not possible to have a general service for reconditioning tyres, not merely for public service vehicles but for lorries and private cars. It is estimated that by the remoulding process you can lengthen the life of a tyre by from 70 to 80 per cent., and some other processes claim to give a life three times as long as that.

It is important to look into the question of how the reclaiming and retreading industries in this country are organised. In the reclaiming industry there are four firms known in the trade as "the ring" situated in the North of England. These firms are the Rubber Regenerating Company, the North-West Rubber Company, Joseph Anderson and Sons, and the British Recovered Rubber Company. There is also an independent company in the south of England, the Rubber Improvement Company, at Willesden. In the retreading industry most of the big tyre companies I have mentioned have their subsidiaries, but there are also a large number of small firms in the industry, and one important independent firm, Tyresoles.

This is my case: That the slow development in the reclaiming and retreading industries, and also to a lesser extent in the manufacture of synthetic rubber, is due very largely to the opposition of the new tyre interests. The new tyre interests have attempted to dominate the reclaiming industry, and it would appear, as far as most of the firms in the reclaiming industry are concerned—those inside the ring—that they are closely connected with the new tyre companies, either by the ownership of shares or by trade relations. In turn, we find that the big tyre companies in the country are closely connected with the plantation interests or with the interests connected with the importing of crude rubber from abroad. However, I think most people would agree that, comparing this country with the other big industrial countries I have mentioned, it is only natural that retreading, reclaiming and the manufacture of synthetic rubber should develop more slowly here than elsewhere, because we happen to possess plantations in Malaya, and until recently we had no reason to suppose that our sources of the supply of raw material were likely to be cut off. But the slowness of the development in these new industries has been definitely accentuated, in my view, by the action taken by the new tyre and plantation interests, who definitely did not like the idea of these industries being developed and have done their best to prevent it.

Before the war—at least up to the date of Munich—we might have argued that this was just the common commercial practice of the established interests in a trade trying to prevent possible rivals coming into competition with them and threatening their markets, and perhaps up to that date it would be difficult to argue that they were necessarily behaving in a way that was not in the national interest. But the case I want to put before the House is that that attitude of the big tyre interests and of the plantation interests has been continued since the time when Munich made war likely, and that that policy from that date, and particularly since the time of the possibility of a Japanese attack on Malaya, has been very much to the national disadvantage.

In the early days of the war the Raw Materials Department of the Ministry of Supply kept an eye on rubber. Then in May, 1941, the Rubber Control was set up. The Ministry of Supply made arrangements early on for the import and stocking of rubber, but the interesting point is that no real control of what the rubber was to be used for, was introduced until 12th December, 1941, when licensing finally came in, after the Japanese attack on Malaya had begun. In fact, from the very earliest months of the war we had a great deal of the rubber brought into this country for war use and stored against possible emergency actually being used by the big rubber companies for the manufacture of golf-balls, toy balloons and many other things which have no value from the standpoint of national defence.

It was only at a very late date that control of the use of the rubber brought into this country was introduced by the Ministry. In response to a Question I put in the House recently, the hon. Gentleman opposite stated that the Ministry of Supply took full responsibility for the policy of the Rubber Control and that the control was there to advise them. Surely it is the duty of the Minister of Supply when he appoints a control and appoints people to advise him, to appoint people who will give him good advice. They should not be people who have a particular axe to grind in a particular business. I criticise very strongly the action of the Ministry of Supply and its advisers in regard to this matter. Whatever one's views might have been about the possibility of a Japanese attack upon us before the fall of France, after that date the danger to our rubber plantations in Malaya should have been evident. The Rubber Control should have had the possibility constantly before them. The Prime Minister told us very definitely that we never had sufficient military resources to enable us to defend ourselves effectively in the Far East while carrying on a campaign in the Western Desert and helping Russia. If that was the case, surely it was all the more necessary for the Ministry of Supply, and later for the Rubber Control, to take precautions to see that our rubber position would not be affected in any preventable way by Japanese aggression.

In June, 1940, came the fall of France. As soon as that took place it was obvious to any person with the meanest intelligence that Japan might attack this country. In July, 1940, came the closing of the Burma Road. That, surely, should have been an eye-opener to many people. In September, 1940, the first Japanese troops went into French Indo-China. Finally, after the setting up of the Rubber Control, in July, 1941, came the Japanese occupation of Saigon and of naval and air bases in South Indo-China, where they directly threatened British Malaya. If nothing was done during all that period to see that proper steps were taken, the people responsible should be condemned by the House and by the country. That neglect was criminal negligence; it was an absolutely disastrous policy. The Ministry of Supply, and the Rubber Control in particular, should be held responsible for that policy.

I want to go into the question of the actual Control, who were the personnel and what changes were gone through. When the Control was set up, Sir Walrond Sinclair, the manager of the British Tyre and Rubber Company, was the Controller. Mr. F. D. Ascoli, the Chairman of Rubber Plantations Limited, was Deputy-Controller. For many years, the Dunlop interests and the British Tyre and Rubber Company interests were at daggers drawn, but they came together when the Control was set up and the Control united them by giving them the chance to dominate the industry. It enabled them to use their position in the Control set up by the Government to dominate the industry. From May, 1941, to December Sir Walrond Sinclair was out of the country for a good part of the time and Mr. F. D. Ascoli was actually in charge. What policy did the Control follow in regard to interests which were vital from the national point of view, during that period? Take the matter of actual storage of crude rubber in this country. Some steps were taken to build up a store, but I think everyone who has knowledge of the subject will agree that we have nothing like as much crude rubber in the country as we ought to have at the present time—either in this country or in the United States. In view of the danger I have mentioned, surely during that period steps should have been taken to see that at least we had a very much bigger store than we have at the present time. And adequate steps were not taken to safeguard the use of the actual supplies we had in the country.

The next point I wish to raise concerns the use of scrap rubber. Nothing whatever was done during this period to make an inventory, as was done in Germany, of what stocks there were, or to see that where scrap rubber was stocked it was not kept in dangerous places. Last winter the Ministry of Home Security experienced one long nightmare because of the danger of fire in old rubber dumps in exposed places. In many cases rubber was lost. In one London suburb, for instance, a big rubber dump actually took fire and burned for a whole week, while in another case the fire was only got out by a miracle. Great pressure has been exerted to get these dumps dispersed. Much rubber was destroyed, either by enemy action or by our own action to minimise risks. In Wolverhampton, for instance, rubber was burnt to get rid of it. During this period there was considerable shipping of scrap rubber over to the United States to be reclaimed. This at a time when we were told that the Battle of the Atlantic was on, and that every bit of shipping space ought to be saved in the national interest. Yet, during that period, scrap rubber was continually shipped over to the States and then shipped back again for our own use when it had been reclaimed, just because we did not develop the reclamation industry in this country.

I now turn to this question of the reclaiming industry. It is my case that even after Japan really became a danger to this country there was no development of this reclaiming industry here. I would like to go in some detail into the relations between the Rubber Control and Mr. John Lewis, the managing director of Rubber Improvement, Limited, the independent reclamation firm which I mentioned earlier, because I think that this controversy is a very enlightening one from this point of view. The first point I would raise is this. Mr. Ascoli and, before him, officials of the Ministry of Supply, were continually approached, and the need to extend the reclamation industry was pointed out to them. Finally, when Mr. Ascoli was nailed down on the issue as to whether there ought or ought not to be an extension of the industry, he made it very clear that, in his view, the present reclaiming industry in this country was fully adequate for post-war needs, despite the fact that at that particular period two of the existing plants had been blitzed and their production had been reduced. When Mr. Ascoli was pressed for Government backing to be given to the industry, he said that it could not be given, but if the firm desired to go ahead and use their own resources the matter would be looked on with a favourable eye.

As soon as the firm took steps to raise their own resources for further develop- ment, every conceivable obstacle was placed in their path to prevent them from getting the necessary plant. May I give one very surprising instance? Sir Walrond Sinclair, on one occasion—he was at that time the Controller—definitely requisitioned a mixer which this firm had bought two days after they had bought it, and then allocated it to Messrs. Dunlop on the ground that they required it for wartime purposes. Apparently he was ignorant of the fact that Messrs. Dunlop were manufacturing very extensively for the home market and could very easily have found a mixer, if they had cared to decrease their output for the home market and turn over one of their own mixers to Government work. It was only when the Ministry of Aircraft Production came into the field and insisted that this mixer was very necessary to make chippings for aeroplane runways that Sir Walrond Sinclair withdrew his order, allowing the firm to go ahead with the mixer which they had themselves bought.

Now I turn to another incident since Mr. Ascoli became Controller, which would be like an episode from comic opera if the times were not so serious. Last summer the firm sought a licence for machinery they had bought in order to extend their work. At that time they had the necessary land on which to erect this machinery. At a date a little later the Air Ministry requested them to expand their existing production for work for the Air Ministry and they gave over that space for part of that production. The Air Ministry said that if the firm did that, they would be prepared to support the firm in an attempt to get further land in the neighbourhood. Negotiations took place with a firm of factors to try to get this land. The negotiations broke down and the Ministry of Aircraft Production said that in their view this land should be requisitioned and offered to the firm. When the Rubber Control heard about these negotiations they closed down on the whole proceedings. Further negotiations took place, and, finally, on one and the same day, the firm received the following very interesting information: Rubber Control were prepared to grant a licence for the machinery required, provided the firm had the land on which to put the machinery; at the same time they also said they would not be prepared to give the firm the right of requisitioning the land on which to put the machinery. That was the way in which the Rubber Control tried to get out of this particular difficulty and to prevent the expansion of the firm.

I pass from that rather interesting saga to the retreading industry. With regard to the retreading industry, the complaint I would make is, that although there has been some expansion of this industry since the beginning of the war, because the big rubber companies could not prevent it, there has been no systematic attempt to carry out a national policy to see that all tyres are collected and retreaded. Surely there is a strong case for a national policy of seeing that tyres both of private and commercial vehicles are used for a reasonable length of time, then collected at the right time, retreaded and the maximum life thus got out of each tyre. Some big rubber companies have gone so far in their opposition to the retreading of tyres—I have had the information given to me by responsible people—that when tests were carried out on tyres that had been retreaded for use by army lorries, attempts had actually been made to falsify those returns in the interests of the big rubber companies. Responsible Army officers who have provided the information are prepared to come forward and give information fully before the Select Committee on National Expenditure if they should agree to examine the facts with regard to this particular industry.

I think everyone will agree that following the Japanese attack very grave disquiet arose in the country as a whole about our rubber position, and when you remember that, according to the latest figures, issued in July, 1941, in that month, of all shipments of raw rubber, 92 per cent. were from countries actually affected by the war with Japan, you can see that there was good reason for disquiet. In view of this disquiet it was felt necessary by the Ministry of Supply that some changes in the Rubber Control personnel should take place. Therefore, from December, 1941, onwards, you have had a large number of changes made. First, the Controller and Deputy-Controller were got rid of, and a new Control Board instituted. On this board were Sir George Beharrel, chairman of Dunlops Ltd., Sir Waldrond Sinclair, who was previously Controller, and who is managing director of the British Tyre and Rubber Co., Mr. Thompson, a rubber broker, Mr. Bennett, a rubber dealer, and Mr. Essex, a rubber reclaimer—at least, it is claimed that he represents the rubber reclaiming industry, and it is true that he is managing director of the Rubber Regenerating Co., but his business is very closely linked up with Messrs. Dunlop. He buys their rubber waste, and sells to them, and it is really believed in the industry that he is a "Dunlop man." A little later two men were added to the Board, They were a Mr. Farrow, a director of a film company, presumably, I suppose, because it was thought that somebody ought to be there who was not representative of the rubber interests, and a Mr. Milne, a rubber grower. A little later Mr. Ascoli, the managing director of Dunlop Plantations, who had previously been Deputy-Controller, was made Controller. He is still Controller to-day. The Control Board was then apparently place3 in an advisory position to him. Those are the changes through which the Control Board has gone.

Without having any quarrel with the gentlemen concerned, I think it is rather surprising that at this stage, when practically all our plantations in Malaya have been overrun, we should still keep on the Board, looking after rubber interests, rubber growers, brokers, and so on, while we do not have a representative of the retreaders on that Board. An attempt has been made, however, to buy off the retreaders. A new Tyre Control Advisory Committee has been set up, and two representatives of the retreaders have been put on that body. These gentlemen are Mr. C. S. Guyatt of Marsham's—this is the firm which I mentioned previously and in which it is widely believed that Dunlop's are interested—and Mr. Patrick Hamilton, the managing director of the large independent firm of Tyresoles. But it is not exactly clear what that Advisory Committee is to do. If one studies these changes which have been made in the Rubber Control Board, one must agree with the old French saying that "the more it changes, the more it remains the same." The vested interests are even more strongly entrenched now than before any changes took place. In the industry there is no confidence whatever in the control, either in its freedom from bias or in its competence to do the job. I would like to read a letter which I have received from a rubber manufacturer in the North of England. It puts the point of view of a number of firms in the industry. It says: You will appreciate that the Rubber Control Board is in a position to call for extremely confidential information from all rubber manufacturing companies and although I cast no aspersions whatever against the integrity of any of the men on the Control Board, I think you will agree that it is inequitable that we and other rubber manufacturing companies should be compelled to disclose confidential information to men intimately associated with competitor companies. In order to remove this difficulty and to save the men named very considerable embarrassment in handling these confidential returns I think it would be far better if the returns themselves were made to a completely independent official appointed by the Ministry of Supply and that the Rubber Control Board should merely act in an advisory capacity. What is the Control Board doing at the present time to deal with the crisis in the rubber industry? First of all, feeling that they ought to do something, they have decided to organise a salvage campaign, and, again, typically, have appointed a Dunlop man to do the job, although he has had no experience in salvage. They launched the campaign in response to public pressure, but they made no attempt to draw up an inventory of where the rubber was or to see that it was stored in small quantities. The local authorities have complained very loudly that they have not been consulted about the campaign. Most of the reclaiming companies have already large stocks of scrap available, and it is not clear what is to be done with all this scrap when it is collected. Are they going to collect it once more in the big cities and create possible fire beacons? If we have to ship rubber across the seas owing to lack of adequate reclaiming plant here, what policy is to be pursued? If you take inner-tubes and reclaim them, the greater part, go per cent. or more, can be reclaimed. If you send tyre cases over the sea, you can only reclaim roughly about 33 per cent. This is wastage of shipping, in view of the shortage of shipping space to send over this material when you can only reclaim half or less of what you send. Surely you can scrape the tyres and send over the rubber free from what is unnecessary if we have not the plant to deal with it here.

On the question of reclamation, the Control now realise that something should be done. Manufacturers have been in- formed that in a few days they will be told how to reclaim rubber from tread chippings and tubes. I understand this will be by the vaseline process which has been in use 30 years, and was revived two years ago at Fort Dunlop. I would ask the Minister of Supply and the Rubber Control Board why they do not use the best and most up-to-date German process, which is fully known in this country. The best German process reclaims in one hour what the best British process does in 24 hours. We ought to use the best process and not hesitate to learn from the enemy, if they have a better process.

What do the Control propose with regard to the general organisation of the industry now that actual crude rubber supplies are short? How do they propose to deal with the big firms in the industry? Before the war all Government work, that is the manufacture of tyres for Army lorries, was done by four big firms, Dunlop, India, Firestone and Goodyear. It was a surprise to these big firms when the domestic market remained large and very remunerative after the outbreak of war. The big firms, who had thought that they would have all the work, found that other people were doing well out of this domestic market. They therefore changed their policy and favoured the giving of Government contracts to the smaller firms while they went into commercial production. According to the latest figures only 7 per cent. of Dunlop's car tyre output is for the Government, and 84 per cent. is for the civilian home market, the rest being for export. Of the giant tyre work, only 40 per cent. is for Government use. We are necessarily to have a big restriction of the industry. These four firms claim that they should have all Government contracts, the argument being that, if their large plants are kept running, they can produce more cheaply than smaller firms. That is very nice for them. I hope that when the organisation of the industry is under consideration the national interest will be allowed to come in. If four big firms with large plants are to have the whole Government work concentrated in their hands, you will create a great danger from the national standpoint. I hope the Ministry of Supply will not yield to vested interests, but will insist on keeping small plants in being, so that production will remain scattered over the country and the danger of destruction by the enemy in a blitz will thus be reduced. I would also like to point out that when this question of tyre production for the Government was first under discussion the big firms I have mentioned had plants constructed for them by the Government. But the small firms have not had Government assistance in building up their plant for Government production, and I hope this point will be borne in mind in any future reorganisation of the industry.

I would like to sum up in this way: In my view you will not get this industry effectively run in the national interest until you sack the Control Board lock, stock and barrel. It has been operating in a most unsatisfactory way, has been most incompetent and biased right through in its attitude towards the industry. What is wanted is an independent Controller, not a person who is in the employ, or who is a former employee, of any vested interest in the industry, and with him an advisory committee which knows the industry thoroughly. That committee should have on it a representative of the rubber manufacturers, and tyre re-treaders, and a man who knows something about the salvage industry, but who is not a man with any particular axe to grind. It should have a representative of the Service users upon it, because there is a big consumption by the Services of tyres and a great deal of scrap coming from the Services to be reclaimed. There ought certainly to be someone on the committee who knows about Service needs and what they have to offer to the re-treading and reclaiming industries. There should also be a research man who knows a good deal about the industry on the technical side and a reclaimer, preferably not under the influence of the new tyre manufacturers. Not only should we consider this rubber control from the point of view of how it operates in this particular industry, but we should be prepared to draw lessons from it and use them more widely. There is a great deal of disquiet in the country about this policy of handing over control of an industry to vested interests. In many cases the interests have been able up to now to cover their tracks and get away with many things which we all know they have been able to get away with.

I have been able to put before the House a number of facts showing bias and incompetence in one control. We should learn lessons from this question of rubber control and apply them in other spheres. I think it is essential that we should change the whole control policy; we should have independent Controllers with people with full knowledge of the industry acting in an advisory capacity. Decisions should be in the hands of the man whose firm would not benefit now or after the war from any action taken. Final decisions should be, under the Minister, in the hands of an independent Controller. This is the only way in which you will get confidence among the different sections of an industry. Unless the vested interests are dealt with, we shall seriously hinder our progress towards victory. We must choose between victory and vested interests and I hope we shall choose victory.

Photo of Mr Thomas Hewlett Mr Thomas Hewlett , Manchester Exchange

I am an interested party. I happen to be chairman and managing director of Joseph Anderson and Sons, one of the largest rubber reclaimers in the country; I have been connected with that concern since 1909, and I can claim to know something about rubber and the reclaimed rubber trade. I say to the hon. Gentleman for Romford (Mr. Parker) that once more what he has been saying proves that a little knowledge is a dangerous thing. Many of the statements he has made are entirely without foundation In connection with my other business, which is to supply raw materials to the rubber trade, I have been in the closest possible touch for the last 34 or 35 years with the rubber industry. I have seen it grow from a baby to a giant.

I want to deal first of all with the question of the Control. I say without hesitation—and I am speaking not only on behalf of myself, but on behalf of the vast majority of those connected with the rubber trade—that the actions of the two Controllers, first Sir Walrond Sinclair and then Mr. F. D. Ascoli, have been strictly impartial and that they have done a great amount of good work for the nation and the trade generally. It is unfair to blame the Controllers or the Rubber Control for the fact that we have had this mess in Malaya and are not able to get the supplies of raw rubber which we would have received had Japan not come into the war.

With regard to reclaimed rubber, may I say, with the greatest possible respect, that the reclaimed rubber industry has always been the Cinderella of the rubber trade in this country. During my long connection with this trade, I have seen raw rubber at one and 13/16ths of a penny per lb., in 1931–32, and at 12s. 6d. a lb. in 1910. There was that variation in the price of the self-same material. With raw rubber at the uneconomic figure of one and 13/16ths of a penny per lb., one can understand that the reclaimed rubber industry in this country found it practically impossible to exist or develop inasmuch as their cost of reclamation of rubber was more than the selling price of plantation rubber. I remember that in 1931–32 I approached my co-working directors, the members of my staff and our workpeople, and indicated to them that collectively we had to make a momentous decision, namely, whether we would close down the factory until the price of raw rubber returned to an economic figure, or whether we were prepared to accept sacrifices and try to carry on until rubber again reached an economic figure. The staff and the workpeople agreed to accept substantial cuts in their earnings, and we were able to carry on until rubber again reached an economic figure. It is hardly necessary for me to say that the cuts have been restored to those loyal workmen and members of our staff.

The hon. Member for Romford has referred to the position in America and pointed out the very great difference with regard to the proportion of reclaimed rubber used in the United States compared with the amount used in this country. In that connection, I am able to enlighten him in one or two directions. In the first place, generally speaking, it has been the practice in this country for the tyre manufacturers to produce what is known as a first-grade tyre, whereas in America the manufacturers have produced not only a first-grade tyre but also second, third and fourth-grade tyres, those in the lower categories containing a large percentage of reclaimed rubber. Secondly, one factor which must not be lost sight of is that the Service Departments and Government Departments generally, and the railway companies, in days that have gone, insisted on their own specifications, and their scientists and technicians played a game of safety first. Therefore, they made a point of their specifications containing practically no loading matter, but being more or less all raw rubber. Therefore, the rubber manufacturers in this country could not do anything less than provide the Government Departments and railway companies with these various qualities of rubber, which, I have said, contain practically all pure rubber.

I now wish to touch upon the question of the export of scrap rubber. Some of the firms shouting loudest at the present time for increased reclaim facilities did not hesitate, so long as it suited their pockets, to be parties to the exportation of scrap rubber and tyres to Germany. In 1937, I drew the attention of the Board of Trade most prominently to the fact that Germany and Italy were buying heavily waste tyres and tubes from this country. I made the most strenuous effort at that time to prevent such exportation. My efforts and the efforts of other people in this country were unsuccessful, and it may interest hon. Members to know that in the month of March, 1937, over 8,000,000 lbs. weight of waste rubber was exported from this country, mainly to Germany, which was 3½ times the quantity exported in the whole of 1936 and double the quantity exported in 1935. By July, 1937, the export of scrap rubber to Germany was more than 10 times the export for the same period in 1936. I will try to explain to Members why these huge purchases were made, and made to Germany in particular.

Germany was developing her synthetic rubber plants, commonly known as buna, and had put into operation reclaim plants of her own, and, to safeguard this new industry of synthetic rubber, she imposed an import duty equivalent to 11d per lb. on plantation rubber, with a view to encouraging her nationals to use home-produced synthetic rubber and her own production of reclaim rubber. Therefore, the rubber manufacturers in Germany offered extravagant prices in this country for scrap rubber, and, as I have previously indicated, some of the firms who are criticising now were shipping these huge quantities of scrap rubber to Germany, including Mr. Lewis, of Rubber Improvement, Limited. In my opinion, Germany built up huge reserves of scrap rubber, thereby enabling her to hold raw materials in anticipation of war breaking out. May I explain what was the posi- tion of the reclaim rubber trade prior to the outbreak of hostilities? The demand for reclaim rubber in this country up to the outbreak of hostilities was such that to keep reclaim rubber plants fully occupied large exports of reclaim rubber had to be made from this country. As I have previously explained, the reclaim industry is the "Cinderella" of the rubber trade, and the Minister of Labour did not recognise the trade as a trade for reservation of employees until April, 1941. Therefore, much of the expert labour was withdrawn from the industry and transferred to the Armed Forces.

To aggravate the position further, two of the reclaim rubber factories suffered serious damage as a result of enemy action in 1940. The wear and tear in a reclaim rubber factory are very heavy, and to-day the industry of the country is working for only 70 per cent. to 75 per cent. of its capacity, due to the shortage of labour and the fact that until quite recently they were not graded as Ai priority for essential repairs to plant. It was a gross mistake when the hon. Member for Romford endeavoured to insinuate that Messrs. Dunlop's and other big tyreproducing interests have done their best to prevent any extension of plant up to the beginning of the war. On the contrary, the companies have in the past been large purchasers of reclaimed rubber, and I have never heard of any of them discouraging the expansion of plant. Dunlops have seriously considered from time to time erecting their own reclaimed rubber plant, and there are two other tyre firms producing reclaimed rubber for their own requirements.

With regard to the retreading of tyres, again the hon. Member's knowledge of the rubber trade is not too good when he asks first why they send tyres to America, which can only yield 33⅓ per cent.; why not send tubes, which would yield approximately 100 per cent? The weight of tubes available for scrap is very different compared with the weight of tyres and, further, the 33⅓per cent. that he mentions as the yield of rubber from a tyre is absolutely incorrect. It is approximately 50 per cent. [Interruption.] I cannot say anything about what the hon. Member was told. What I have stated are the actual facts. There is mis- conception on his part, and on the part of the Press generally, on the subject of retreading used tyres. Reclaimed rubber manufacturers have always advocated that suitable casings should be retained. The tyre manufacturers themselves have advertised freely in past months with a view to persuading their customers to send their tyres for retreading. In addition to tyre manufacturers, there are many firms concentrating on the retreading of tyres. The reclaimers are anxious that only tyres with unsuitable casings, which are not fit to be retreaded should be sent for reclamation.

There has been much comment in the Press about the uneconomic price of scrap. It has been the custom in the past of the larger reclaimed rubber manucturers and rubber merchants to hold large stocks of scrap, particularly tyres. Towards the end of 1940 there arose throughout the country a great agitation that these large dumps of scrap should be dispersed as a precautionary measure against fire from incendiary bombs. My firm had several hundred tons of tyres. Officials of the Blanchester fire brigade inspected our premises, indicated that they were dissatisfied with the stacking of our dumps and said we must re-stack them in squares in such a way that fire engines could get round the four sides of the square easily. We re-stacked to their satisfaction. A few months later the North West Regional Commissioner's Department inspected our premises and indicated that they were not satisfied with the stacking that we had done in accordance with the instructions of the fire brigade, and that we must remove all tyres with the exception of 100 tons. The result was that, as we could not find the labour, the authorities sent men, and they took away from our yard hundreds of tons of tyres. We eventually ascertained that the major portion of them had been thrown into a disused clay or sand pit and the remainder had been thrown into an ornamental lake in one of the Manchester parks.

It being the hour appointed for the interruption of Business, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do new adjourn."—[Major Dugdale.]

Photo of Mr Thomas Hewlett Mr Thomas Hewlett , Manchester Exchange

Another reclaimer had several thousand tons of tyres removed from his premises for similar reasons. This instruction also applied to waste rubber merchants, and it will readily be seen that tyres were of no value. We could have bought hundreds, if not thousands, of tons at a nominal few shillings a ton, but the difficulty was where to store them. Everybody was a seller because nobody was allowed to have an accumulation of tyres, and there were no buyers. Look in that clay pit and in that ornamental lake, and you will find our tyres, and the North-Western Regional Commissioner says, "If we want the tyres back, we must fetch them back."

I want to try and make some constructive suggestions. The first is that the reclaimed rubber manufacturers should be provided with the necessary amount of labour, A1 priority should continue to be issued for essential repairs, and pressure must be brought to bear on the rubber engineers to give first class priority to these essential repairs. That would increase the production of reclaimed rubber by 25 to 30 per cent. Secondly, arrangements should be made with the present reclaimers, including the independent reclaimers, to increase the capacity of their plants by 50 per cent., and again Ai priority should be insisted upon in the production of the necessary machinery.

Photo of Mr James Griffiths Mr James Griffiths , Llanelly

What does the hon. Gentleman mean by the independent reclaimers?

Photo of Mr Thomas Hewlett Mr Thomas Hewlett , Manchester Exchange

The hon. Member has spoken on two occasions of Mr. Lewis, of the Rubber Improvement Company, as an independent reclaimer. We have a Reclaim Rubber Association, of which Mr. Lewis is not a member. He is a very small reclaimer, who poses as an independent reclaim rubber manufacturer, and he is most anxious to become a member of the advisory committee of the Rubber Control.

Photo of Mr Richard Acland Mr Richard Acland , Barnstaple

Was not Mr. Lewis the only firm that did not export rubber to Germany?

Photo of Mr Thomas Hewlett Mr Thomas Hewlett , Manchester Exchange

I doubt whether he exported any rubber to any country. My third proposal is that the prices of reclaimed rubber and re-treadable tyres should be controlled. The fourth is that the price of scrap rubber should be controlled, but not on the lines indicated in the Press. According to my reading of the newspapers, dealers are to pay £1 a ton for motor covers, then deliver them to the merchants' depots, who are to pay £2 2s. 6d., then the merchants are to sell the same tyres to the reclaimers for £3 2s. 6d. Why all this unnecessary handling and intermediate profits? The dealer has to collect the tyres from garages and other places, then convey them to the merchants' depots, where they have to be unloaded, and then the reclaimer has to send his vehicles to the merchants' depots, load the tyres on to the vehicles, and unload them at the reclaiming factory. I ask you.

I ask you, why should there be this waste of transport, petrol and labour? Why should there not be just one transaction of the dealer delivering the tyres to the reclaiming factory, thereby saving unnecessary transport and, similarly, saving a large amount of money, estimated at £400,000 to £500,000 per annum? Some may say that this would mean that some tyres suitable for retreading would arrive at the reclaiming factories. My reply to that is that we have always given facilities for any genuine retreader of tyres to inspect our stock of tyres and extract from the same any tyres which he was of the opinion were suitable for retreading purposes. Finally, the extension of the present plants or, if the Minister decides, the erection of new plants for the reclamation of rubber should be confined to well-known and fully-proved processes. This is not the time to erect plants for methods of reclamation which have not been proved either in this country or in the United States of America, but is the time to increase production in the speediest possible way by utilising existing plants up to 100 per cent. and extending existing plants.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Stockton-on-Tees

I think this Debate has been of great value, particularly at this moment, because there is naturally considerable interest in the country in a problem which is of great national importance at the present time. In the two speeches to which the House has listened we have had an admirable example of two methods of approaching a common problem, one based on practical experience over a long period of years and the other on what might be called theoretical research, both of them of the greatest value in the study of any problem. My hon. Friend the Member for Romford (Mr. Parker), who opened this Debate in a very well documented and very well-prepared speech, covered a great deal of ground, but, as may easily happen, and has certainly befallen him and, I expect, most hon. Members in their experience in the House of Commons, he has fallen into some of the traps which lie open to anyone who brings largely theoretical research to any problem. He began by telling us of the much greater development of the reclaimed and the synthetic rubber interests in America and in Germany by comparison with what had taken place in England and gave interesting figures of the percentage of those increases. He said that Great Britain reclaimed only 7 per cent. whilst America reclaimed 38 per cent., and that in the United Kingdom the reclaiming industry—here he did not give percentages because percentages would not have suited his argument—had risen from 5,000 tons to 10,000 tons—that is Rio per cent. rise—whereas in Germany it had risen from 75,000 tons to 175,000 tons. I notice that he gave percentages when they suited his argument and tons when they, in turn, suited his argument. It is a dangerous example of how figures can be used.

Photo of Mr Frederick Bellenger Mr Frederick Bellenger , Bassetlaw

You give the percentages.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Stockton-on-Tees

We had the correction when the experienced man came in. The hon. Member had forgotten an overwhelming consideration which explains the difference in these industries and their development. The first consideration was that crude rubber was grown very largely in the British Empire and was sold for sterling. It was sold sometimes very cheap, so cheap that a reclaimed industry on a purely economy basis could not exist at all. In America there was a feeling before the war that very large amounts of American money were being spent upon one of the very few raw materials which America herself did not produce, and therefore, for ordinary economic reasons, they set about the development of the reclaiming and synthetic rubber industries, largely because they did not wish to con- tinue to part with dollars in order to purchase larger amounts of this raw material which were in British control. Then, in the case of Germany, there was a strategic reason. I remember once saying in this House that the first real sign of danger was when Germany began to build up these great synthetic rubber and rubber reclaiming industries regardless of economic values, because it was an essential part of the preparation for war. For two quite different reasons in America and in England, the artificial industry, as one might call it, was developed.

Photo of Mr Frederick Bellenger Mr Frederick Bellenger , Bassetlaw

That is a very valid argument, but if the Minister could tell the House that we built up tremendous stocks of raw material, it would demolish the argument put forward by my hon. Friend.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Stockton-on-Tees

I am afraid I cannot do that, because I am not going into the question of stocks and rubber, and I am sure hon. Members will not expect me to do so. I was trying to answer that the hon. Member had missed the overriding considerations which led, before the war, to this type of development in the two countries. I think that point must be accepted by us all.

Now the hon. Member asks, What is the situation we had to meet at the beginning of the war and what steps were taken in the light of the changing circumstances? He made, very ably, what might appear a rather sweeping condemnation of those who were responsible from the beginning. There were some considerations which ought to be remembered in any general picture which is drawn. First of all, no control was put on, in the ordinary sense of control, until the beginning of the war, as only a very small proportion of rubber was used for any but essential war services. I have figures which I will give in terms of percentages. The hon. Member made a statement which shows how dangerous information of this kind can be if it is not fully understood. For a firm like Dunlop, I think he said, the proportion of the tyre production on Government account was only 7 per cent. That is merely using the term "on Government account." If by that term you mean direct sale to the Government, that may be true, but 96 per cent. of their production of tyres is on Government account, either directly or indirectly—

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

They sold it to motor-car manufacturers.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Stockton-on-Tees

Yes: that is so—and is used for the Royal Air Force and other essential Services, and by public utility undertakings. In other words, only four per cent. of the total production of tyres has been used for private motoring. Here is a very good example of a statement which sounds terribly damning, and is made in perfectly good faith, until it is examined in accordance with the actual facts.

The only reason why a tight control like the iron and steel control or the nonferrous metals control was not imposed at the beginning of the war was that only a very small percentage of the total production of rubber was used otherwise than directly or indirectly upon Government account. That has a good and a bad side. Its bad side is that the economies we can make in the use of rubber are not from a use spread over a large area of private users. There is no source there that we can squeeze in. I would make it clear that, although we shall put some minor restrictions upon the public, asking them to give up some things which are not wholly necessary and to make every possible saving, the sphere of saving which we can get from private use is small, because the total quantity of rubber used on private account is such a tiny percentage of the whole. With the economies which we shall have to make, and are making with the help of the Services, we hope to reach a very substantial saving in the consumption of rubber, but they will be economies which will have to be made, and are being made, by the various forms of public, semi-public or public utility enterprises which are the main consumers of rubber to-day.

Then the hon. Gentleman went on to make a very strenuous attack upon the gentleman whom the Minister, and successive Ministers, had asked to advise him or to operate for him in connection with rubber since the beginning of the war. It has been my good fortune to serve three Ministers of Supply, and it may be my fortune to serve a fourth—I do not know. I seem to be the old stager who carries on while Ministers come and go. I have served a Socialist Minister, an Independent Minister, and my noble Friend. I have certainly never heard discussions about controls and advice being given to the Minister on a Party basis. I am afraid that in my Ministry we have forgotten those old disputes. My first Minister, the present Home Secretary, was advised by these gentlemen, some of whom are now so bitterly attacked by the hon. Gentleman the Member for Romford. All through, this has been of great concern to the Minister. I observe that if a man is a working man and is not a member of his trade union, he is a blackleg, but if he is an employer and is a member of an employers' association, then he is a criminal character and a member of a ring, and I have never understood that the gentleman from whom my hon. Friend has obtained a great deal of information, out of which he has made a very entertaining story, is what is called an independent reclaimer and is not disposed to join a particular association.

From the point of view of the Government, we have attempted to face this problem. If we obtain advice on any question—rubber, iron, steel or any of the other commodities which are now subject to control—we must either get advice and help from people who know something about the matter, in which case, of course, we are said to have handed ourselves over to the ring, or we have to get advice from people who know nothing whatever about the conditions of the industry, in which case the Government and the public are badly served. What we try to do is to operate the controls under men who have a long association with a particular industry and who have gained a high reputation in it. It is interesting to note, and I welcome the fact, that my hon. Friend in his excellent speech paid a tribute to some of these gentlemen, although he was speaking from the point of view of a different and perhaps competing side of the industry. We try to obtain the services of men like these to work in association with the Civil Service and the permanent secretariat, who all the way through are associated with these controls, to bring in the independent management which is necessary and right.

Nothing would detract from the responsibility of the Minister, but at the same time I do not feel that the House will share my hon. Friend's attack upon this particular gentleman. Sir George Beharrel is very well known in this country, which he has served extremely well in a great industry. He served it very well during the last war. It is very easy to go through the list of these people and throw ridicule upon them, but they represent the industry very widely—manufacturers, growers, brokers, dealers, and reclaimers, and through the Tyre Control Committee, who are also closely associated with this advisory body, the Retreading Association. In his account of the complaints of the Rubber Improvement Company, my hon. Friend has really been rather misled. It is a firm which represents about 2 per cent. of the whole reclaiming industry; there have been some transactions in which from time to time we have been able to help them, and I am glad to say we have now been able to help them over a difficulty about a particular machine, but the story of this firm's relations with the Ministry of Aircraft Production and the Ministry of Supply was a fantastic parody of the truth.

What is the real situation with regard to the reclaiming of rubber? Here, if I may detain the House for a few moments, I want to make it quite clear that the real underlying fact is that the use of reclaimed rubber is limited by the total quantity of crude rubber available, for the reason that you can only use a certain percentage of reclaimed rubber, according to the character of the commodity you are making. You cannot make the whole thing out of reclaimed rubber; you can only use a certain quantity of reclaimed rubber. It is true that the use of reclaimed rubber in the United States was greater than in this country before the war. The chief reason was because of the very large number of low-grade tyres made for cheap motor-cars and the much greater use of rubber for footwear and that kind of thing which had been developed in the United States. We do not particularly want to use our rubber for footwear, and we certainly do not want a lot of low-grade tyres for cheap motor-cars, because those are just the type which are going out of production. You cannot at the moment use more than a comparatively small proportion—I believe about 10 per cent.—of reclaimed rubber in the manufacture of the grade of tyres necessary for the lorries and the form of transport, the only form of trans-, port, which we are now encouraging or allowing. There is this paradox, that there is no object, no purpose, in developing, in increasing the reclaimed rubber industry beyond the proportion and ratio you require, having regard to the amount of crude rubber you will be able to obtain. I can confidently tell the House that we expect this year, by means of the reclaiming industry, with additional assistance by speeding up some of its work by giving those higher priorities which are a matter of adjustment in the changing conditions of the war, that the total quantities of reclaimed rubber will be equal to the amount which can be used having regard to the crude rubber available.

Photo of Mr John Parker Mr John Parker , Romford

Reclaimed rubber is used not only in the manufacture of tyres but also in the making of aeroplane runways.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Stockton-on-Tees

I am taking all the general uses. Of the total uses of rubber, between one-half to two-thirds goes in the manufacture of tyres. There is one point I must make clear, and that is that it is worth while to get done whatever reclaiming can be done, and to expand reclaiming, while at the same time it is right for us to do what the hon. Member poured such contempt on, that we should ship rubber salvage to the United States because we can obtain in return for that, and have arranged to obtain, material which we are requiring for our own war effort. By that means, we are not in any way reducing the total increase in the reclaiming industry, but we are getting, by a quid pro quo, a certain amount of additional crude rubber, which in itself allows us to push the reclamation of rubber still further. That seems a very satisfactory arrangement. Although we are trying by study to find a method of increasing the proportion of reclaimed rubber which can be used, this seems the best thing to do. My hon. Friend says that we have not developed synthetic rubber. Of what is synthetic rubber made? It is made by the trapping of oil. What would be the purpose at this time of setting up oil-trapping plants?

Photo of Mr James Griffiths Mr James Griffiths , Llanelly

Has the development of reclamation and retreading of rubber been sabotaged? In the industry which I know attempts to get oil have been sabotaged by the oil interests.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Stockton-on-Tees

No. Synthetic rubber is made by the trapping of oil. It is all right to trap the oil where it exists, but not to bring it here in order to trap it. It is right, and it is the whole purpose of the arrangement we have made with our Allies—no longer our associates, but our Allies—in the United States to make use of raw materials in the place where they are found in order to have the products made and interchanged.

Photo of Mr James Griffiths Mr James Griffiths , Llanelly

That means that there is an arrangement between this Government and the Government of the United States to develop the synthetic rubber industry in the United States?

Photo of Mr Harold Macmillan Mr Harold Macmillan , Stockton-on-Tees

Yes, on an immense scale. The object is that each country shall develop what can be best and most rapidly developed. There are other things in respect of which we are able to assist our Allies. It is always hard in this sort of discussion, particularly for a Parliamentary Secretary, who speaks with the same responsibility but without the power of a senior Minister, not to fall into one or other error. We want to save as much rubber as we can. I am not going to say what is our stock. I am not going to give an optimistic figure or a pessimistic figure. I am only sorry that certain observations were made about the character of our reclaiming interests. I would suggest that my hon. Friend should take a little more optimistic view of his fellow-men, and not to be so ready to assume that everybody is either a fool or a crook. I do not think he will go very happily through life with this jaundiced view. Let him be a little wary of men who run to Members of Parliament with small and petty grievances. Let him follow a more generous line; but let him, if the Ministry fail to provide the essential rubber required for the war effort, by all means direct his censure at those upon whom the responsibility lies.

Photo of Rear-Admiral Tufton Beamish Rear-Admiral Tufton Beamish , Lewes

Does my hon. Friend not think it essential to educate the public by means of a series of broadcasts on the care of tyres and their methods of repair?

Photo of Mr Harold Macmillan Mr Harold Macmillan , Stockton-on-Tees

I am very much obliged for that suggestion. We will certainly make use of it.

Question, "That this House do now adjourn," put, and agreed to.