Orders of the Day — Steel Industry and Road Haulage

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

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Photo of Mr Duncan Sandys Mr Duncan Sandys , Wandsworth Streatham 12:00 am, 12th November 1951

The Amendment moved by the Opposition makes two criticisms. The first is that the Government's proposals will not assist the national effort. I notice it is not suggested in the Amendment that our proposals will be actively harmful to the national effort; in their Amendment the Opposition have carefully avoided stating that our proposals would be harmful to the industry, and we —[HON. MEMBERS: "No."] If hon. Members will read the Order Paper they will see that that is correct. We have to be grateful for small mercies, and we are, at any rate, grateful for the restraint and moderation which the Opposition have shown in framing this Amendment, though I must say that the right hon. Gentleman in moving it somewhat departed from that tone.

I shall certainly try as far as possible to show moderation and restraint in handling this difficult, and, if I may say so, prickly question. But I must from the outset make it clear that we on this side of the House hold rather more positive views on this question than those expressed in the Amendment. We remain sincerely convinced that the decision to nationalise the iron and steel industry was a very grave error. We believe that the continuance of nationalisation will not only not assist the national effort, but will more and More actively hamper it. [HON. MEMBERS: "How?"] We regard it as our duty to restore conditions of free enterprise without which, in our opinion, this industry will not be able to make its maximum contribution to the national output.

The right hon. Gentleman referred to the importance of steel. I think we can all agree upon that. Steel and steel products, such as ships, vehicles and engineering goods of all kinds, account for about half our total exports. It is clear, therefore, that steel is going to play a major and vital part in the efforts which have now to be made to restore the balance of payments and re-establish the country's solvency. The shortage of steel which exists in all countries at the present moment has had the result of creating a sellers' market throughout the world. However, our exporters cannot rely upon these abnormal conditions continuing indefinitely.

At the present moment, the United States are expanding their steel producing capacity by an amount greater even than the total capacity of the United Kingdom. By the time their re-armament is completed, American steel capacity is likely to be sufficient, not only to meet the continuing needs of American defence and to supply the vast requirements of the American home market, but also to provide a very large surplus for export. The same thing applies to Germany. Germany is steadily recovering her economic strength. Her output of finished steel and of steel products is all the time increasing, and she is once more entering the export markets of the world. The same can be said of Japan. Therefore, it is perfectly clear that before very long British exporters are going to have to face formidable competition.

If we are going to hold our own in the markets of the world, British steel producers must be able to exercise independent initiative and judgment. They must, above all, not be handicapped in relation to their foreign competitors, who are operating under conditions of free enterprise.

The right hon. Gentleman who moved this Amendment argued, and made much of the point, that, since nationalisation, the Iron and Steel Corporation had not interfered drastically or in a damaging way in the affairs of the steel companies under its control. Up to a point, that is perfectly true, but the Corporation has only been in control for a few months. It has clearly not yet got into its stride.

If nationalisation were to continue, the Corporation would, if only to justify its existence, have to become a great deal more active. Gradually, but surely, the units of the steel industry would inevitably become less and less capable of independent initiative and action, and less and less flexible. [HON. MEMBERS: "Why? "] These great companies, whose names and reputations stand so high in the world, would more and more lose their separate identity and, with it, much of the goodwill and the specialised markets which they have built up. [HON. MEMBERS: "Rubbish."] It is not rubbish. The specialised markets and goodwill which have been built up by these companies are a precious national asset and can only be preserved under conditions of reasonable independence, which is, in the long run, quite incompatible with public ownership.

The second criticism made in the Amendment is that our proposals are going to create uncertainty in the industry. We seem to have heard this phrase before. It has a familiar, almost a friendly, ring about it. But, if I may say so, it looks a little unhappy and out of place in its new context. The Opposition are now charging us with creating uncertainty in the steel industry. [HON. MEMBERS: "Hear, hear."] It comes strangely from the party opposite. Who first created the uncertainty? In his speech last week, the right hon. Gentleman who was Chancellor of the Exchequer went so far as to warn the Government against throwing a spanner into the works. It is the right hon. Gentleman and his colleagues who threw the spanner in. What we are going to do—