Iron and Steel (Transfer of Functions)

– in the House of Commons at 12:00 am on 27th October 1955.

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10.2 p.m.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester and Chatham

I beg to move, That an humble Address be presented to Her Majesty praying that the Transfer of Functions (Iron and Steel) Order, 1955 (S.I. 1955, No. 876), dated 21st June, 1955, a copy of which was laid before this House on 25th June, be annulled. The Government have presented us with a very serious proposition. They seek to impose additional heavy burdens and responsibilities upon an already overburdened Department. It was as recently as 1953 that the House was called upon to pass these requirements under the Iron and Steel Act and scheduled the Ministry of Supply as the responsible Department. I do not know why there should now be a change.

It may be that the Minister will argue that the Ministry of Supply is required to give all its attention to defence matters and therefore should be released from other duties such as are required to be carried out under the Order. I would say to the Minister that 1953, when we were in the midst of the armaments drive, and when indeed defence commitments were very heavy, would have been the time to suggest transferring these functions from the Ministry of Supply to the Board of Trade. I hope that in this era of peaceful co-existence the emphasis on defence is not so great as in 1953 when the House gave powers to the Ministry of Supply.

What is required of the Board of Trade if it accepts this new responsibility? It will be responsible for the appointment of all members of the Iron and Steel Board. It will be the duty of the Minister to keep the Board informed of all that goes on in the European Coal and Steel Community. As we know, the Government have decided that there shall be closer associations, and the work involved will be greater than hitherto. Therefore, the amount of work will be heavier for the Board of Trade today than it has been for the Ministry of Supply.

The Minister will be able to provide additional production facilities should they be required in the national interest. That is a very formidable undertaking. If an existing steel works were to be threatened with closure, the Minister could step in and take it over, and, either directly or through an agency, keep production going. Again, if an enterprising group of people wished to enter iron and steel production and were prevented from doing so by the Iron and Steel Board, the Board of Trade could step in and say that the group could enter the industry.

The Minister has power to order the Iron and Steel Board to effect the direct importation and distribution of any iron and steel production as a common service to the industry. If it is transferred to the Board of Trade, the Minister will be able to modify the industry's Equalisation Fund. As we know, that means that the price of iron ore which comes into the country at a higher rate than home-produced ore can be levelled out, so that the same rate can be charged for both. I am told that a couple of years ago the amount involved represented approximately £100 million. That is a formidable sum.

The Minister is also empowered to demand any information from a producer and to inspect his documents. If that job were undertaken, it would be a tremendous task for those engaged on it. The Minister can also order the Iron and Steel Board to deal with any specific subject in the Annual Report. I gather that in this connection it could deal with the five-year development plan. That, too, would impose a burden on an already over-worked Department.

I am not objecting to the Board of Trade taking over the duty because it is incompetent. Far from it. From my personal experience of the Department, I know that it has some of the most highly qualified and loyal servants to be found anywhere. But the work which they already have to perform is sufficient for them to tackle, particularly when, as I regretfully have to say, they do not receive all the support to which they are entitled from Ministers. I am not criticising Ministers as such, but only in the sense that the Government have changed them so frequently that they have not been in their jobs long enough to give the required co-operation. The Minister of State—a most competent Minister—is the fourth Minister in the job. I only hope that he will stay long enough to render the able service which I know that it is possible for him to give.

So far as the Board of Trade is concerned, its responsibilities are already very heavy. With certain exceptions, the Board of Trade has a general responsibility for the industry and commerce of this country. It is responsible for insurance, company law and patents. It is going to be pretty busy in the near future with bankruptcies, particularly as a result of the Chancellor's policy as outlined in the Budget. It is worth noting that the bankruptcy rate had risen even before the Chancellor made his statement yesterday.

In addition, there is the matter of weights and measures to be considered. A Committee was set up to go into this matter. It issued a Report, but, as yet, nothing has been done about it. It may be a minor matter, but it is of great importance to those interested in weights and measures. There is also the matter of the copyright law. A Committee was set up to look into that, and I understand that its Report is now before the House of Lords.

Another important matter in connection with our economic troubles is that of waste paper recovery. The President of the Board of Trade himself said that supplies to the mills are between 5 and 10 per cent. below requirements. Here is a means of saving foreign currency. Certainly not enough is being done in that direction. I am sure that the Minister is painfully aware, from what he has been told by his colleagues who represent Lancashire divisions, of the dire straits of the cotton industry. The furniture trade is also in a pretty poor state. Perhaps the Minister can say when the British Furniture Trade Joint Industrial Council will receive a satisfactory reply following the deputation which went to see him. I should also like to mention the question of monopolies and restrictive practices.

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

The right hon. Member is now straying very far from the Order. Monopolies are not mentioned at all.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester and Chatham

I merely wanted to mention it as being one of the questions which has to be handled by the Board of Trade. I did not intend to debate that matter, but merely to mention it. To add to that list responsibility in relation to iron and steel is to impose upon the Department too much for it to tackle.

I was only going to say that the Monopolies and Restrictive Practices Commission should be tackling the question of identical tenders in housing matters, but they have not done so. Then there is oil. There was a United Nations Report which alleged that some companies were making 400 per cent. profit. In spite of that, petrol prices have gone up. If the Board of Trade were doing its job it might have looked into that question more thoroughly. The Minister may not know that he has a tobacco adviser. That may be why he is not so well informed about the pricing system. The Board of Trade also has responsibilities in connection with films, tourism, distribution of industry, the promotion of exports—for which the Minister himself is responsible—import and export licensing, exhibitions, the Export Credit Guarantees Department, commercial relations and treaties.

The last-mentioned is a great obligation, and a job that must be done with thoroughness if we are to obtain the best results for our country. I know from my association with the Board of Trade and from answers which have been given in the House that in the case of some Eastern European countries trade treaties which should have been settled long ago are still hanging fire. Civil servants cannot be blamed at all, because most delegations are led by Ministers.

It is the responsibility of Ministers to debate and argue in these cases. The President of the Board of Trade has seldom had time to do so. No wonder it is not possible to get satisfaction in that direction. Recently we had a debate on Canada, and the Minister was as much concerned as I was over the fact that trade with Canada was falling. The Department should be giving attention to that matter.

It would be wrong to give additional work to a Department which has all these responsibilities to carry and which is not dealing with them as satisfactorily as they should be dealt with. The case against transfer to the Board of Trade is strong, and I shall be very interested to hear the Minister's reply. He is specially qualified to deal with this matter because he has had experience of both Departments, and it is upon his reply that we shall decide what action to take.

10.14 p.m.

Photo of Mr John Jones Mr John Jones , Rotherham

I intend to speak very briefly. Like my right hon. Friend, I shall listen very attentively to the reasons why this proposed transfer should take place. We in the steel industry are very proud of its achievements and very loth to part with the affinity which exists between the industry and the present Minister of Supply as a result of the functions of the Ministry of Supply being transferred to the Board of Trade. I get around and I watch carefully what is going on. If my observations are of any use, I would say that the last thing that should be done now is to give the Minister responsible for the Board of Trade something more to do. My impression is that he has not managed to do the job that the Board is intended to carry out at the moment. To hand over that very fine industry—the great British steel industry—to the present Minister savours to me almost of disaster.

The Board of Trade has many functions to perform, and deals with all the ramifications affecting production. I see the former junior Minister of that Department turning round and smiling. If he has anything to say, he will support me in my assertion that it has much more to do than it can already manage.

Why it is sought to make this change now I do not know. Whether it is intended that the Ministry of Supply should become a defence Ministry and the next step is for it to be under the War Office, I do not know. I do know that the men employed in the industry, the managements and the present owners, despite all the contention which we have had and all our arguments in the past as to who should own and control the industry, will see this transfer take place with a certain amount of dismay. We have always felt that the arrangements that have existed between the various companies and the unions, the Federation, the Steel Board and the Holding and Realisation Agency, which are still very important bodies, have been of paramount value to this country, and, if judged by the production of steel, have worked very satisfactorily.

I ask the Minister to look again at this proposed transfer because we believe that the existing arrangement is a good one. The contacts between the engineering industry, the Defence Services, the Royal ordnance factories and all the variety of interests which have to be dealt with—of which I had some knowledge as a junior Minister—are of value, and I say without question that unless the Minister can give some really concrete reason why this change should be made, he should leave well alone. My own opinion is that to put this great industry into the position proposed, and under the jurisdiction of the Minister at the moment in charge of the Board of Trade, is a retrograde step, and should not take place.

10.17 p.m.

Photo of Mr John Hynd Mr John Hynd , Sheffield, Attercliffe

Like my hon. Friend the Member for Rotherham (Mr. Jack Jones), I should like to hear from the Minister what it is proposed to achieve precisely by this transfer, and whether, in fact, the Board of Trade will do any better in regard to the present situation in the industry by taking more action of an effective kind than the Ministry of Supply.

I would draw attention to the fact that, in the "Bulletin for Industry" for this month, which is issued by the Government, mention is made particularly that the demand for steel in 1954 was running ahead of home steel production and that a substantial tonnage of imports would be needed. One reason we have this Budget today is due to this fact that we are running into heavier and still heavier balance of payments difficulties. The Bulletin goes on to say: Total imports of finished steel by consumers and merchants may exceed one million ingot tons this year against 330,000 last year. It also gives the price of imported steel as being on the average 15 per cent. higher than for home-produced steel.

I have here a letter from one of the steel companies in my own constituency which I received this morning, in which I am told: The steel position seems to get worse every week and many of our large steel makers in Sheffield have practically closed their order books. That is because of the shortage of steel for fulfilling these orders. The letter goes on to say: I understand that the Iron and Steel Section of the Ministry of Supply has been transferred to the Board of Trade. When I found this change, I wrote to the Board of Trade, but the only reply I received was that they would put any concrete cases before the Iron and Steel Authorities to see if they would help. I replied that until the Board of Trade was prepared to tell the Iron and Steel Authorities what could he done and what should be done with regard to exports, I was not prepared to continue butting against a stone wall. The reason these steel firms are having to close their order books, although they have demands for orders which they cannot fufil, is that they cannot get the steel; although buyers of steel have, in the last few years, been accumulating all the steel they could get and hoarding it against the time when prices would be higher and steel still less available. If there is the slightest reaction in the manufacture of steel, those buyers will unload their supplies on the market at black-market prices. Indeed, I am told today that although essential export orders cannot be fulfilled because of shortage of steel, the firms can buy on the black market all the steel they want.

If the transfer of steel supply functions to the Board of Trade means that the power to deal with a situation of that kind is not to be used with any more effect than it has been used up to the present, it may well be that we shall need to have a special supplementary spring Budget to adjust still another deficit in our balance of payments. I should like to hear from the Minister whether he is aware of the allegations which I have made, on very good grounds, about the factors which are preventing us from fulfilling export orders and are contributing to the adverse balance of payments; and if so, what he proposes to do about the matter when he takes over from the Ministry of Supply?

10.23 p.m.

Photo of Sir Austen Albu Sir Austen Albu , Edmonton

I should like to follow the observations of my hon. Friend the Member for Attercliffe (Mr. J. Hynd) about the responsibility of the Department for the Iron and Steel Board, particularly in regard to the iron and steel industry investment programme, for which the Board is responsible. It is responsible also for ensuring an adequate level of producing capacity. This responsibility for the supervision of the Iron and Steel Board in regard to these functions will now be transferred to the Board of Trade.

I am not sure of the actual figures, but I suppose that one-fifth or more of the consumption of iron and steel in the metal-using industries will still continue to be the responsibility of the Ministry of Supply in connection with the defence programme. There is a serious danger that the over-all supervision of the level of steel production required in this country may fall between two stools. I do not know what responsibility the Board of Trade will take for ensuring an adequate level. My hon. Friend has just pointed out that there is a serious shortage growing up, exaggerated by the operations to which he has been referring. He will probably agree that there is a real shortage growing up very fast.

The value of steel products imported this year is near the £100 million mark. It will certainly be as much as that next year if the industry continues to expand at its present rate. A large part of the imports represents dollar exchange. One of the most important functions of Government policy today must be to see whether investment in particularly important basic industries is on a sufficiently high level, unless the Government expect a reduction in economic and industrial activity consequent upon their recent actions and unless the consumption of iron and steel is likely to fall.

The Board of Trade now has responsibility for securing adequate steel production capacity, whereas the Departments which are entirely concerned with the sections of industry which consume steel are now to be divided. Knowing the lack of coordination between Government Departments, and particularly between the defence and the non-defence Departments, our anxiety is considerably increased. When the Minister replies I hope he will deal with this point seriously, because it is of the very greatest importance. I have no doubt that the lack of balance between the expansion of some of our manufacturing industries and the capacity for production of the raw material required is the cause of the present inflationary situation.

My guess is that, very largely because of the need to import raw materials and to pay dollars for them, raw materials are very much higher in price than the cost would be of producing them in this country. My fear is that the situation will be made much worse by this transfer of the functions of supervising the capacity of the iron and steel industry from the Department which has, or had, over-all supervision of the whole of the metal-using industries to one which will have the supervision of, at the very most, only 80 per cent. of them.

10.25 p.m.

Photo of Mr George Lawson Mr George Lawson , Motherwell

I should like to echo the doubts which have been already expressed about the advantages of making this transfer. I should not like to argue that in the steel industry we have so much to be proud of. I do not say that to disparage the efforts of those employed in the industry, but I cannot but remember that when, in the immediate post-war years we suffered tremendous shortages of material, the outstanding shortage was of steel. When we remember that the steel industry did not surpass its pre-war output until 1948—when it was under the imminent threat of nationalisation—we cannot but feel that if, under the old order, one industry let the nation down it was the steel industry.

I say that of the industry as it was, but I doubt whether we shall find any advantage in the proposed change. The point about exports has been well brought out. The fact that over the last year the all-important steel industry should still be importing a net amount of some £3 million worth of materials per month of imports over exports is again a reflection on it. Is this the contribution which has been made to our balance of payments problem? In the period from April to September, 1954, the average monthly import of iron and steel was £2,013,000; in the same period of 1955 it was £8,344,000. That is a very substantial increase, and one which has taken the industry far in excess of its exports of iron and steel.

That was under the existing order, and one must certainly feel very doubtful whether there will be any improvement under this omnibus Department—the Board of Trade. When we recall all that has been said yesterday and today about the inflationary difficulties of the country, and recall also what has happened in the steel industry, we can see that that industry is making no helpful contribution to the problem.

I want to take as an example the Scottish part of the industry, with which I am concerned—and when I speak of the "Scottish part" I mean almost entirely the firm of Colvilles. Look at what happened when that firm was sold back to the private investor. In the first place the firm had been bought by the Government for some £10 million.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

On a point of order. Are we allowed to discuss the denationalisation of the steel industry, Mr. Speaker?

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

I was waiting with patience to see how the hon. Member for Motherwell (Mr. Lawson) was going to connect this with the proposed transfer. On the scope of debate, I should perhaps say that the functions which are being transferred are themselves based on other enactments which are not before us. To be relevant, and therefore in order, speeches must show that the industry, in some way or other, will be affected by the proposed transfer. That is the narrow point, and the only point with which we are concerned.

Photo of Mr George Lawson Mr George Lawson , Motherwell

My view is that while we can very legitimately criticise the manner in which the Ministry has been conducted in the past, we can express still greater doubt as to whether it will be conducted with more efficiency in the future under the new form of control to be set up. I am trying to express my very great doubt about that. I am pointing out that in the past, even with a closer control over what took place, there were developments that might be, and could be regarded as, injurious to the country's economy. I was citing, when I was interrupted, what did take place under nationalisation and how, because of the manner in which this particular company had so—

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

The hon. Gentleman really is going too far. He must relate his speech to what is proposed in the Order, and that is the transfer of certain functions from the Ministry of Supply to the Board of Trade. The history which he has given us is very interesting as to the background, but we are not discussing that. We are discussing whether it is a good thing or not to transfer these functions, and the hon. Gentleman must confine himself to that.

Photo of Mr George Lawson Mr George Lawson , Motherwell

Mr. Speaker, is it not the case that it is proposed to make the transfer because it is considered that the industry will be more advantageously supervised from the point of view of the national interest? I take it that is why it is proposed to make this transfer, and if that is the case, I should have thought I was entitled to contrast the ways in which the industry has been conducted, and to express, as I am trying to, my doubts about this change in responsibility, this change as to whom the industry is answerable. I am trying to argue that, far from being an advantage, this change will be a grave disadvantage to the country. It is from that point of view that I am trying to develop my argument.

Because of the way in which this industry was sold, there was generated within this limited sphere an inflationary pressure in the country. The firm cost £10 million to buy. It was sold back, or part of it was sold back, for £13 million —10 million 26s. shares. There had been paid out during the period of nationalisation —

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

I really do not see what this has got to do with the Order before us. The hon. Gentleman is now recounting the history of the nationalisation and denationalisation of the steel industry. That has nothing whatsoever to do with this Order. The position is that, up to the time when this Order became effective, certain functions with regard to Government control of the steel industry were vested in one Department, and it is now proposed to transfer them to the Board of Trade. The past history which the hon. Gentleman is relating does not seem to me to bear on it in any way. He must show that it is a bad thing—if he believes it to be so—that the Board of Trade should inherit these functions. That is the point of the debate.

Photo of Mr George Lawson Mr George Lawson , Motherwell

I have already tried to show that it is a bad thing, or is in my view likely to be a bad thing. One cannot be positive because the transfer has not taken place; one can only theorise on matters of this kind and say, if it was bad before under a Department which could direct its mind more closely to the problems of the industry, it is likely to be worse in future. That is the only point that I am trying to make.

My argument is that what has happened in these past few years has been a bad thing; what has happened, particularly during the past year since denationalisation, has been particularly bad, and, that being the case under the Ministry of Supply, it is likely to be worse under the Board of Trade. That is the argument which I am trying to make, and I should have thought that, since the question of inflation is so important to us, a measure which means that the industry is paying very much more than it was up to the beginning of this year, 1955—when it was paying 3½ per cent. on the stock that had gone to its purchase, and it proposed immediately before nationalisation to pay 9 per cent. on the new stock that was issued.

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

I must ask the hon. Member to bear with me if I interrupt him. I do not see how that matter is at all affected by the transfer of functions, I do not see how that is changed because one Department, the Board of Trade, takes over from the previous Department, the Ministry of Supply. The hon. Member must confine himself to the Order before us.

Photo of Mr George Lawson Mr George Lawson , Motherwell

Since you will not permit me to develop the arguments, Mr. Speaker, I will simply put the point that we have had many examples of something very bad, certainly in 1955 some things exceedingly bad, for the interests of the industry and the nation, and I suggest that the transfer will make things very much worse.

10.35 p.m.

Photo of Mr Fred Mulley Mr Fred Mulley , Sheffield Park

I do not wish to strain either your patience, Mr. Speaker, or that of the House, but after all the speeches which we have heard yesterday and today about the trouble with the economy being that we are trying to do too much in too short a time, to suggest that a Department which clearly is either overworked or incompetent—and I suspect both—should be given charge of another vital industry is treating the House with contempt.

I am sure we shall be told that the civil servants in the Ministry of Supply who are concerned with the steel industry will be transferred to the Board of Trade, but I tell the House frankly that for my part I have no confidence at all in the present occupant of the Presidency of the Board of Trade.

Photo of Mr John Jones Mr John Jones , Rotherham

Nor has the steel industry.

Photo of Mr Fred Mulley Mr Fred Mulley , Sheffield Park

He is the Minister with a grave responsibility for exports, one of the major problems facing the country, and for the whole question of monopolies and restrictive practices—in respect of which he has shown no industry at all in bringing these matters to the House—and it will have grave consequences to the economy to entrust him with the fortunes of the steel industry. While I do not wish to make any adverse criticism of the civil servants in the Department, we all know that if there is a Minister at the top who procrastinates, the industry and the various Departments are bound to suffer.

We in Sheffield were not very impressed in the discussions which the silverware and cutlery industries have had with the Board of Trade on various points. When copper was scarce we found that the Board of Trade was not prepared to fight for the interests of these industries, and I wonder whether it will be prepared to fight, as it will have to fight, perhaps, for the interests of the steel industry against the Treasury and other Departments.

Sheffield is the major steel-producing area of the country, and we should particularly like to know what will be the status of the Board of Trade office in Sheffield. At the moment we have a regional controller at the Ministry of Supply in Sheffield, but I understand that the Board of Trade has only a sub-office. I have been told by many people that they have had difficulties with the Board of Trade office in Sheffield in that the local people, admirable though they are personally, have no power to take decisions. Everything is channelled either to Leeds, which causes great dissatisfaction, or to London.

In view of the tremendous economic importance of the industrial district around Sheffield, I should like to be told by the Minister what plans they have for the organisation of the Board of Trade in the Sheffield region. I tell him frankly that the people in Sheffield are not satisfied with the arrangements which have existed hitherto.

10.39 p.m.

Photo of Mr Hilary Marquand Mr Hilary Marquand , Middlesbrough East

Everyone who has spoken so far has been very brief, and I shall be no exception. We have occupied only 40 minutes on the subject. It is an important subject, and it is a great pity that we can discuss it only late at night, when we are all pressed for time in one way or another.

I want to ask the Minister what will happen under these new arrangements to two of the greatest steel firms in the country, both of which have plants in Middlesbrough. They are the South Durham Steel and iron Company Ltd., and the Dorman Long Company. They are both very large units indeed. It might be thought by people in my constituency and the other constituency in Middles-brought, and in the surrounding constituencies where these great concerns flourish, that what this Order means is that in future these concerns will be solely supervised, so far as the Government have power of supervision over them, by the Board of Trade. But will they? Are they perhaps making a mistake in thinking that that will be the position hereafter? A good many mistakes have been made recently about what exactly has happened in the steel industry.

I noticed recently in one of the newspapers, when the South Durham Company gained a very magnificent order for supplying oil pipe lines to Canada, that this was said to be due in some way to the denationalisation of the industry. But, of course, the South Durham Company is still publicly owned. It has not been denationalised at all. Dorman Long, on the other hand, has been denationalised.

What we in Middlesbrough want to know is how will each of these companies, one of them still in national ownership and the other denationalised, fare under the new arrangements which are being debated tonight. The Chancellor of the Exchequer has a responsibility for the supervision of no less than two-fifths of the steel industry. He told me that in answer to a Question which I put to him, which can be found in col. 12 of the OFFICIAL REPORT, Tuesday, 25th October.

The Chancellor gave me a long list of all the firms which are still nationally owned, no fewer than nine of them in South Wales, including the Steel Company of Wales, Ltd., Richard Thomas & Baldwins, and five on the North-East Coast including, as I have already said, the South Durham Company and a great many other well-known North-East companies like Consett and Skinningrove. These great companies are still in national ownership, and the Chancellor of the Exchequer still has, as he admitted in the Answer he gave to my Question, a responsibility for carrying on the steel industry.

It may be said by the right hon. Gentleman that that is only a temporary state of affairs. But how temporary is it to be? It is two years since the Iron and Steel Act was passed, and the Chancellor is still in the picture. How much longer is the Chancellor to be in the picture? While he remains in the picture, what are his relations to be with the Board of Trade when this Order is put into operation? Can the companies that I have mentioned, which still remain in public ownership, have direct access in future to the President of the Board of Trade or must they do it through the Iron and Steel Holding and Realisation Agency which at present holds their common stock, and must it then in turn ask permission of the Chancellor of the Exchequer before an approach is made to the President of the Board of Trade, who will now have this responsibility placed upon him?

What kind of an administration is this going to be? It is going to be a divided and muddled administration. Surely the best thing the Government can do tonight is to withdraw this Order and tell us that they are going to introduce—dare I say it?—new legislation putting the industry into one unit once again.

10.44 p.m.

Photo of Sir Toby Low Sir Toby Low , Blackpool North

When the right hon. Member for Rochester and Chatham (Mr. Bottomley) was speaking it seemed to me that the main Opposition case against this Order was not that the Board of Trade is the wrong Department to have responsibilities for iron and steel but that the Board of Trade is already so overloaded with work that the addition of this responsibility will make the Board, as the Opposition put it, even less efficient than it is now. That appeared to be his case. The case of some of his hon. Friends, I think, is different. They do not like the Board of Trade very much, or some of them appear not to have the same high opinion of the Board of Trade staff as does the right hon. Member for Middlesbrough. East (Mr. Marquand) and the right hon. Member for Rochester and Chatham.

Photo of Mr John Jones Mr John Jones , Rotherham

What is the right hon. Gentleman's opinion of it?

Photo of Sir Toby Low Sir Toby Low , Blackpool North

My opinion is one of very high regard for the Board of Trade.

Mr. Malley:

Mr. Malleyrose

Photo of Sir Toby Low Sir Toby Low , Blackpool North

Many points were made but I shall try to answer them all. If the hon. Member is patient, I think he will find that I have dealt with him quite faithfully.

The hon. Member for Attercliffe (Mr. J. Hynd) introduced arguments about the need for allocation of steel; that is what it amounted to. He was saying that the reason why this matter should not go to the Board of Trade was that the demand on the steel industry today was very high. That is just one of the things we have been discussing in the last two days' debate and which we shall, of course, be discussing tomorrow. Certainly, the demand on the steel industry is very high, and imports of steel have gone up, but all that took place under the Ministry of Supply and that does not seem to me a very good argument for saying that it is wrong on those grounds to pass the thing over to the Board of Trade.

Photo of Mr John Hynd Mr John Hynd , Sheffield, Attercliffe

I never said anything of the kind; I did not say it was wrong. I asked whether it was proposed to take any more steps than were taken under the Ministry of Supply to deal particularly with the hoarding question, to which the Minister has not referred.

Photo of Sir Toby Low Sir Toby Low , Blackpool North

I quite see that, but I assumed that the hon. Member was arguing with some relevance to the Motion which is before the House, which is to oppose the transfer of functions. The heavy demand on the steel industry is, of course, a problem of general economic policy and one which we have been discussing, amongst others, in the debate today and yesterday. The hon. Member is quite right that on the other side of the balance sheet, as it were, the level of production of the steel industry is very important. He omitted to state that since 1951, production of finished steel in the country has gone up by over 20 per cent.

Photo of Sir Toby Low Sir Toby Low , Blackpool North

During the last two or three months I have had a number of letters from hon. Members on the subject of shortage of steel, particularly for some rather smaller consumers. I have been putting them in touch with the proper authorities, who have, I think, in practically every case, been able to help them. The best way of discouraging hoarding is by having the right credit policy. My right hon. Friend the Chancellor's policy will deal with that much more than a policy of direct physical controls or exhortation or anything else, and it was because of the failure of hon. Members opposite to understand this that they got into some of the difficulties they did.

Photo of Sir Toby Low Sir Toby Low , Blackpool North

I do not want to get involved in this—

Photo of Sir Austen Albu Sir Austen Albu , Edmonton

It is too deep for the right hon. Gentleman.

Photo of Sir Toby Low Sir Toby Low , Blackpool North

I do not consider that it is very deep, but it would be quite wrong to go into these matters in this debate. I did not want to refer to the matter before and I thought it was only courteous to hon. Members who have addressed arguments to me if I referred to them at the outset of my speech.

Let me come back to what, I thought, was the main case made against us by the right hon. Gentleman, the case of overloading. I shall refer to it in most of my speech because I take it as a serious point and it is one that we have seriously considered. Right hon. and hon. Members opposite ought to bear in mind that things are slightly different in the Board of Trade, and, indeed, in other Government Departments, today from what they were in the days when they were in office. In their days, they were exercising hundreds of controls over prices and allocations of materials and goods, which have now gone and which we do not intend to see come back—although, from some of the things said earlier today by hon. Members opposite, it would appear that some of them are prepared to see those controls come back.

I am not going to pursue that further except to quote some figures of staff in the Board of Trade which are some guide to the sort of load on Ministers. Despite the fact that we have just absorbed the iron and steel and engineering industries divisions of the Ministry of Supply the total non-industrial staff of the Board of Trade is today 7,366 as against 10,092 at the start of 1951. I agree that numbers of staff are not a final guide to the burdens of Ministers, but the numbers of staff show that there was more staff at the time when right hon. Gentlemen opposite were in office than there are now.

Photo of Mr Hilary Marquand Mr Hilary Marquand , Middlesbrough East

Could the right hon. Gentleman tell us the number of Assistant Secretaries, the people really responsible for policy?

Photo of Sir Toby Low Sir Toby Low , Blackpool North

No, I could not straight off, but I shall be happy to give the right hon. Gentleman that information. I did say that it was only some guide and not a final answer.

The right hon. Gentleman, in his somewhat imaginative and very wide-ranging speech, that roved from tobacco to bankruptcies, and from exports to monopolies and a lot of other things, made one quite inaccurate statement. He said that we in the Board of Trade were responsible for the delay in the trade negotiations with Eastern European countries. If only the right hon. Gentleman sometimes read the answers to Questions, answers given by the Chancellor of the Exchequer and by my right hon. Friend, he would know that the delay in those negotiations is due to difficulties in talks about debts. That has been made plain over and over again, and that has, as the right hon. Gentleman will know, nothing to do with Board of Trade Ministers.

I will explain why this Order is necessary and try to remind the House why, in the Government's view, the transfer of functions is good policy. I should make it clear that the transfer has already taken place. The Order came into operation on 18th July. Some hon. Gentlemen were speaking as if we were today to decide whether it should take place. We can, of course, decide that the transfer shall be cancelled, but the transfer has taken place, as is stated at the head of the Order.

The Government's decision to make this transfer of both the iron and steel industry and the engineering industry from the Minister of Supply to the Board of Trade was announced by the Prime Minister on 14th June. No transfer of functions order was required in connection with the engineering industry since the Minister of Supply had no statutory functions specifically in connection with that industry. It was different with iron and steel, because of the Minister of Supply's statutory functions given to him in the Iron and Steel Act, 1953, and certain statutory powers which he had under the Defence Regulations which the Board of Trade did not have.

The reasons for the transfer were explained to the House by the Prime Minister on 14th June. I will quote the important part of the statement. He said: The purpose of this change is to relieve the Ministry of Supply of duties extraneous to its prime task of supplying the Armed Forces, and to associate the Board of Trade more closely with certain major industries which are of great importance to our export trade."—[OFFICIAL REPORT, 14th June, 1955; Vol. 542, c. 422.] In the discussion that followed the right hon. Gentleman the Member for Easing-ton (Mr. Shinwell), who was sitting where the hon. Member for Attercliffe is sitting now, declared he was in agreement with this policy. Arising out of that the Prime Minister later had to explain to the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) that: This development is largely due to the increasing importance of the export trade in relation to supply for the Services. These industries are to a large extent the heart and centre of our export trade and it seemed right that they should be the concern of and should be looked after by the Board of Trade."— [OFFICIAL REPORT, 14th June, 1955; Vol. 542, c. 425.] The right hon. Gentleman, in opening, said that he thought the defence case was not nearly so strong as in 1953, or as in earlier years. But the Prime Minister, in his answer to the right hon. Gentleman the Member for Vauxhall touched on that point, too, when he said: The Ministry of Supply will, in fact, owing to new technological developments, have very much more work in that field than it had before."—[OFFICIAL REPORT, 14th June, 1955; Vol. 542, c. 423.] That really is the answer to the right hon. Gentleman on that specific point.

I should like to say something about the history of this; and that is important. Before the war, the Board of Trade had responsibility for iron and steel and for engineering. Then, after the war, the Socialist Government said that the responsibility for iron and steel and engineering should go to the Ministry of Supply. Let me say straight away that we do not claim that that was wrong because, at that time, the country was faced with many production problems. Raw materials and production capacity were short. There were many controls, and British exports were limited by what we could produce, and not by competition from other countries, or by tariffs and quotas.

But now things are very different. The main problems of industry as a whole are in export and trade matters, and I emphasise that, even if the Ministry of Supply was still responsible for iron and steel and the engineering industries, the Board of Trade would be dealing with the matters of real importance to those industries—with matters of tariffs, such import controls as still remain, export control, bargaining with other countries for large quotas, and the whole of our national commercial policy which is vital to these industries. Let us not forget that these industries are responsible for more than 40 per cent. of our total exports.

Therefore, it is clear that in these matters, the Government's decision announced in June to make the transfer of responsibility does not add work to the Board of Trade, for the responsibility was there before; it was there all the time. Indeed, it is arguable that, in putting the Board of Trade in direct touch with these industries, there may well be some reduction in the burden of administrative work.

I would deal now with some general considerations about the iron and steel industry. The first is—and I expect that there will be general agreement on this—that, within the Government, responsibility for the iron and steel industry should be in the same hands as responsibility for the engineering industry. Here, I join with my old sparring partner, the hon. Member for Rotherham in paying tribute to this industry which, as he has said, is working so well; but I remember some of the things which he said in 1953, from which one would have thought that by now the industry would have been dead.

Photo of Mr John Jones Mr John Jones , Rotherham

It was the previous Prime Minister, the right hon. Gentleman the Member for Woodford (Sir Winston Churchill) who said that we should have chaos and that the industry would fail in its objectives. It was the Tory Party which said that nationalisation would "make it go west." But nothing of the sort happened.

Photo of Sir Toby Low Sir Toby Low , Blackpool North

I will not pursue that point. There will be general agreement, I think, that responsibility for the iron and steel industry should be in the same hands as responsibility for engineering. Secondly, the Iron and Steel Board has, by statute, the responsibility for supervising the iron and steel industry and, in particular, for maximum prices, for development, for encouraging research, and for helping to secure adequate and economic supplies of iron and steel products. This Board has now been working for more than two years, and working well; and, of course, the setting up of the Board has reduced the administrative load which the responsible Department had to carry when there was no Board. There is no doubt about the success of the Iron and Steel Board, nor of the respect which it commands throughout the industry.

The right hon. Member for Middlesbrough, East went into the relationship between the Chancellor of the Exchequer, the Iron and Steel Holding and Realisation Agency and the President of the Board of Trade. The Chancellor's relationship is not affected by the Act; in so far as he may have had to deal with the Minister of Supply, in future he will deal with the President of the Board of Trade.

For the special iron and steel functions of the Government, as set out in the Act, the staff employed in the Ministry of Supply on duties connected with the iron and steel industry has come over to the Board of Trade. It is not large, 23 persons, compared with 77 in the Ministry of Supply before the Board was set up and 99 when we took over in 1951.

My third point is that the main fields in which Government policy affects the iron and steel industry are, in any case, Board of Trade fields. I have made the point once in connection with the iron and steel and the engineering industries together, but it applies particularly to the iron and steel industry. Tariff policy, import and export controls, and perhaps most important just now, trade policy matters arising out of our relations with the European Coal and Steel Community, are clearly matters for the Board of Trade, and were so, even at the time when the Ministry of Supply had responsibility for the iron and steel industry. On all these matters the Board of Trade would have had responsibility, even if the iron and steel industry had remained with the Ministry of Supply.

From time to time, during discussion of this matter, tribute has been paid to what the Ministry of Supply has done. I well know, as does the hon. Member for Rotherham and the Parliamentary Secretary to the Ministry of Supply who is sitting beside me, how well the Minister and his staff have worked with the iron and steel and engineering industries for all these years. I know what they did by their close contact with these industries and by encouraging increased production and exports. But the real help which the trade departments of the Government give to industrial exports is through having the right commercial policy. It is much better to help in that way than to rely on exhortation. It seems to us wise that the men who make British commercial policy should have direct contact with the industries which make nearly half our exports. It is wise both from the point of view of industry and of the Government.

The hon. Member for Edmonton referred to the problem of allocating resources in the engineering industry for defence and for civil purposes, including exports. I have seen it suggested that it would be wise to have one authority, the Ministry of Supply, for that purpose. I believe that there is a misunderstanding there. In so far as such an allocation is made by Government decision, it is not a decision by one department, and never can be; it is the decision of the Government as a whole. I believe that this system was operated during the Government of the party opposite and it has certainly been an interdepartmental decision during the life of this Administration and that of its immediate predecessor.

These are some of the objections. I have tried to deal with them, and to give the House the reasons which we had in mind. I can assure the House that we very carefully considered the effect of the transfer upon the industries concerned and upon the Board of Trade, bearing in mind the points that have been made by hon. Gentlemen opposite. Of course, it is true that there will be some increase in the burdens on the Board of Trade. There must be some increase, but we do not believe that it will be serious. But we believe, in the words that I have just quoted from the Prime Minister, that there are positive advantages in this move. There are positive advantages from the point of view of the Ministry of Supply, the fourth defence Department as it was referred to by the Prime Minister two days ago, and from the point of view of the Board of Trade.

I am sure that it was a good thing to have this debate and that this was a matter which we ought to have discussed, and I do not think that anybody can say that all the arguments have been on one side. The Prime Minister, in his statement to the House, was very careful to say that this was a matter of balance. There were differing views in industry. In the case of the iron and steel industry, no objection was made. In general it is fair to say that both sides of the industry accepted the Government's decision.

I repeat that it is a matter of balance, but on balance it is right to make the transfer and I sense that the Opposition itself is not at one in criticising us on this transfer. Indeed, I have already reminded the House that the right hon. Member for Easington expressed himself openly in support of it. It is a good thing that we have debated the matter and I hope that, having heard the reasons that I have adduced in support of the transfer, the House will now be ready to see the Motion withdrawn and let the Order go on.

Photo of Mr Hilary Marquand Mr Hilary Marquand , Middlesbrough East

Before the Minister finally sits down, would he say to which department of the Board of Trade the Iron and Steel Board will have to refer? There are departments within the Board of Trade, or at any rate there used to be.

Photo of Sir Toby Low Sir Toby Low , Blackpool North

In this House we deal with the President, the Minister of State and the Parliamentary Secretary. There is an iron and steel division in the Board of Trade. As I said earlier, it has come over from the Ministry of Supply.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester and Chatham

It is wrong of the Minister to misrepresent my hon. Friends. We all agree that this Government are incompetent. They carry a heavy responsibility for the present economic crisis and we regretfully have to come to the conclusion that whatever Department is entrusted with carrying out the policy of this Government is doomed to failure. In the circumstances, I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.