Raw Materials (Shortage)

Part of the debate – in the House of Commons at 12:00 am on 2 March 1951.

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Photo of Mr Harold Wilson Mr Harold Wilson , Huyton 12:00, 2 March 1951

Yes, on very many occasions indeed, and at the highest possible level. We have, in fact, made strong representations to the American authorities continuously since the first allocation was made and this matter will now be considered by the newly established Cotton and Cotton Linters Commodity Committee which is meeting in Washington in a few days time.

With the serious situation of American cotton the Raw Cotton Commission have been very active in seeking supplies from elsewhere. In fact, they have been doing this for some years past because of the dollar shortage; and with the advantage of centralised buying and with appropriate long-term contracts they have been extremely successful in increasing supplies. They have done exactly what the hon. and gallant Member for Wembley, North (Wing Commander Bullus) was talking about. They have scoured the world. They have brought forth new supplies by the mechanism of long-term contracts and by bulk contracts with the Sudan, with British East Africa, with various countries in East Africa including long-term contracts with Nyasaland, and Nigeria. At the present time imports of raw cotton from the Colonies have increased to about 8 per cent. compared with the 3 per cent. of total imports in pre-war days.

I am sure that hon. Members, particularly those representing Lancashire constituencies, will realise the grave position with which we are faced in the consumption of American-type cotton, because of the United States allocation, despite all that has been done to bring in supplies from other countries, often at very high prices. Whereas last year American cotton represented 58 per cent. of the total usage of cotton of American types, this year under the present allocation it will be only 36 per cent.

If I could draw a conclusion from the case of cotton because it is relevant to the Motion of the hon. Member, our shortage here is due to the severely restricted allocation from North America, and, as I said in the House last week, the amount of cotton we get in this country is directly the result of the size of the allocation made by the United States Government. Private buying or centralised buying would make no difference to that. I am sure that hon. Members will not challenge that statement, although the right hon. Member for Southport (Mr. R. S. Hudson) did say —I thought rather churlishly—"We have only the right hon. Gentleman's word for that, and we do not accept it." If that is what the right hon. Gentleman really feels about this question, it is a most unwarrantable reflection on the United States administration to suggest that there would have been more available to us if we had bought cotton through private and not through public channels. In fact, I do not think that anyone would seriously maintain that view.

The "Manchester Guardian" whose trade notes I regard as providing a little more expert and practical experience on cotton questions even than the right hon. Gentleman, said last week: Mr. Wilson's statement that the size of the allocation would have been the same whether private buying or centralised buying was practised by this country, will be accepted more readily in Lancashire than it appears to have been in certain parts of the House. As for my second conclusion, that the Raw Cotton Commission has in fact bought more from the rest of the world, outside the United States, than private buyers would have bought, the "Manchester Guardian" went on to say: It will no doubt also be agreed that, as Mr. Wilson said, in the purchase of cotton outside the United States the Raw Cotton Commission had secured amounts far above anything bought by private buying. So I would submit to the House that in my first case the Motion of the hon. Member cannot be substantiated and I notice he did not even attempt to argue it.

Let me turn to a second item, sulphur, about which we are extremely anxious although it is in fact on public purchase, the only change being that since 1940 the buyers have acted as purchasing agents for the Government instead of as principals. The National Sulphuric Acid Association buy the sulphur for the manufacture of sulphuric acid. Three firms purchase the sulphur used directly in industry. There has been no disagreement in the dollar programme between the trade buyers and the Government. In fact dollars were allocated to the purchase of the supplies available even during the worst period of the dollar crisis.

An account of the development of the sulphur position was given by the Chancellor of the exchequer in his speech on 15th February. About two-and-a-half years ago, long before Korea, the American sulphur producers, who were kept fully informed of forward requirements, said they could not provide more sulphur than was needed for acid plants then in operation or being erected. This was because they were worried about mineral reserves, as a long-term problem and so the Government had to place a limit on further expansion of sulphur using capacity, and enforce a switch to pyrites or other alternatives.

We were informed last July that the supply for acid products in 1951 would be considerably less than expected and we had to make emergency arrangements to reduce fertiliser production and so on. In October reports reached us that the United States were contemplating export licences and strong representations were made to them about the allocation we should require—representations again at the very highest level. But when we received notice of the allocation at the—

end of December we were in fact given 81,465 tons for the first quarter against a requirement even on the present restricted basis of something like 112,000 tons.

We therefore had to introduce immediately restrictions on supply both of sulphur and sulphuric acid. We have been working on a detailed allocation scheme for sulphur and for sulphuric acid. That allocation scheme is now ready for introduction. I am bound to tell the House that it presents a very grave picture indeed. With the amount of sulphur that appears to be in sight, unless the allocation is increased, the allocation means that, while we should maintain supplies at as high a level as possible for steel production, oil refining, tin plate, vegetable oils, metal extraction and refining, and essential food and health services, there would be a serious reduction in the general chemical industry and a very serious reduction indeed in the rayon industries and in many industries using both sulphur and sulphuric acid.

The effect on the rayon industry is one which it is most serious to contemplate, since it would involve a cut in production—which has already been affected by some 20 per cent.—as serious as 40 per cent. of the output of the industry. I am sure that I do not need to stress the seriousness of this to the House. It is not only a setback to the hopes that industry had, and that we all had, for this greatly expanding industry. It not only means a severe restriction in supplies to the home market if we are to maintain our eventual export targets. It would also have an extremely serious effect on employment, particularly in the textile industry, because, of course, the use of rayon is by no means confined to the rayon industry, and it would affect both Lancashire and Yorkshire.

Again, since rayon was providing us with a relatively cheap substitute for wool and cotton, particularly in mixtures, I do not need to stress the effect it would have on the cost of living. Nor do I need to stress the general effect of cuts of this kind on the whole industrial economy of the country, because sulphur enters into every phase of the national economy. The effect of reductions of this kind are not only grave: they are incalculable and immeasurable. One cannot say until months afterwards what will be the effect in detail.

It is certain that these cuts will profoundly affect our ability to maintain industrial production and to mount the defence effort which this House has approved. I trust that it will not be necessary to introduce the allocation scheme to which I have referred: but it is right that the House should be warned of the possibility. Representations are still being made to the United States administration. The Sulphur Commodity Committee is now sitting in Washington. The United States administration have been most helpful and understanding about our difficulties, and I trust that they will be able to increase the allocation to us, because I am sure they will realise the damaging effects on our production and on the defence effort in which they, as our partners, are as concerned as we are.

If our allocation is not increased by 30,000 tons, or so, a quarter, which we require—a figure which I should tell the House is only equal to about 3 per cent. of total United States consumption—

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