Orders of the Day — Light Castings Industry, Falkirk

Part of the debate – in the House of Commons at 12:00 am on 1st May 1953.

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Photo of Mr Harold Watkinson Mr Harold Watkinson , Woking 12:00 am, 1st May 1953

I think I should start by thanking the hon. Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) for putting his case so factually, so carefully and so well, and for avoiding any party political controversy on a matter which, as he rightly says, is not a party political one. It is a very serious problem, and his constituency will certainly feel that he is doing his duty on their behalf in raising it in this House in such an able and fair manner.

The hon. Gentleman said that I would be replying not only on behalf of the Ministry of Labour but for other Ministries, and that is true. On the whole it is appropriate that the Ministry of Labour should deal with this matter, because the end product in this business is unem- ployment, which is where all the human problems arise. It is, therefore, proper that I should reply, and, of course, I have consulted my colleagues on this matter.

It would be for the information of the House and of the hon. Member if I could briefly give the up to date position, because that is the responsibility of my Ministry. In the Falkirk area—and by area I go as far as Grangemouth and Bonnybridge—there are 50,000 insured employees. First of all I want to point out that a very high proportion of the employees depend upon the iron foundry industry. That takes in a little more than light casting. No less than 22 per cent. of the insured population is employed in the iron foundry industry, compared with a national proportion of under 1 per cent. That shows how much this area depends on one industry. All modern economic planning regards that as a dangerous position for any area to be in.

The unemployment position is that 1,128 are out of work, of which 242 are wholly unemployed and 886 are temporarily stopped. In all, there are roughly about 1,400 people on short time including the 886 who are temporarily stopped. I do not deny for a moment the hon. Gentleman's point that the situation is serious, but in examining how the position has arisen we must look at it carefully, and here once again we find ourselves up against the problem of the area being dependent on one type of industry.

I do not quarrel with the hon. Gentleman's general assessment of the position, and let us hope that some of the temporary measures now affecting the industry may improve. It is possible, for example, that Australia may further relax her import cuts, and that will give direct benefit. She has still got an enormous housing programme in front of her, and if she relaxed rather more her reduction on imports that might be an immediate help; in fact, the only immediate help that one can foresee for this sort of industry. Anything that my hon. Friend the Secretary for Overseas Trade can do to get restrictions taken off in the export markets fairly soon would greatly help.

As far as the home market is concerned, I am afraid the main reason— and we have been into this very carefully—is that there was a wave of panic buying about 12 months ago. Merchants stocked up with these light casting goods and that back lag is still to be worked off. When it has been worked off it may be that orders will flow back more readily to the foundries, but it is our belief at the moment that there is still a good deal of stock to be worked off so that there is no immediate prospect of any help from the home market.

The hon. Member put the long-term reason for a drop in demand, and I think I should consider that, because it is right that the industry should not assume that there is going to be some sort of automatic recovery to the position of about 12 months ago. Let me give an example. I was only recently in a factory that makes large numbers of baths. They are made out of three steel pressings welded together. It may not be such a good bath as the type produced in the hon. Member's constituency, but they are, after all, baths, and are exported all over the world. They are, I am afraid, a direct inroad on the market once supplied by the Carron Iron Foundry and other foundries in the Falkirk area.

Therefore, in dealing with what we may be able to do about it, we must face the fact that the total market for these products will be somewhat decreased. That would leave out of account any ingenuity or efficiency on the part of the firms concerned. After all, if I remember my history correctly, the Carron Iron Foundry once made most of the cannon and shot for the whole of our artillery. Obviously, they managed to modify their product to changing times, and I hope that they and associated industries will manage to do so again, with the cooperation of the trade unions and of employers. I hope they will find new products for new markets, but they must face the fact that some of their existing markets are certainly not what they were.

The Government think, on their present information, that there may be some hope of a pick-up but that it is unlikely that the industry as a whole will go back, at any rate within the immediate future, to the peak production of 12 months ago; but that the present level of orders might be hoped to improve, particularly if we can get some further relaxation in export markets.

We must, therefore, look at the problem from the long-term view to see what can be done. On the national picture as a whole, as I have said before, we must consider local remedies inside the general framework of our national plan. If we do not continue to overcome satisfactorily our balance of payments crisis, nothing that we want to do inside the country is possible.

For example, in the hon. Member's constituency, the application of National Insurance benefit for a man who has a large family, and thus draws a good deal of children's allowance and, perhaps, some National Assistance, can result under the present levels of benefit in his being almost as well off without work as he is when in work. I know that that is no consolation, and I do not suggest that the man would not far rather be doing a job. What I do say is that the State has taken upon itself the responsibility of very greatly mitigating the hardship of being, we hope, temporarily out of work; and it can only continue to support that responsibility if the country as a whole does not go bankrupt. To do that we must not have another balance of payments crisis. Any suggestion that I may make must, therefore, be considered in relation to this problem of keeping the national economy and costs as a whole in balance.

Turning to the local position, the first necessity is more diversity of industry. My colleagues in the Board of Trade are doing their very best to try to persuade new industries to come into the area.