It is a platitude, perhaps, to talk of the importance of the steel industry. All
parties agree upon that. Without steel the life of Britain would collapse. So far as I can
see there is not one trade of importance that could be carried on without it. All our
capital equipment depends on steel. Steel, and steel-using industries, account for nearly
half the value of our exports. This proportion has grown considerably since the War and
may well grow further. Our future dependence on these industries in achieving solvency and
prosperity Will then become even greater. Not only our prosperity, but our security and
influence on World affairs will depend largely upon our iron and steel industry; on
whether it is efficient enough over a long period to produce cheap steel in ample
quantities, and responsive enough to national requirements. It is because we believe that
it cannot become either of these things as long as it remains in its present private
ownership that we have introduced this Bill. We should have been failing in our duty if we
had not done so.
There are, as far as I know, only three ways in which this industry can operate, -Its
ownership and control can be left in the hands of the steel masters as in the early
pre-war years; or ownership can remain with the steel masters subject to a certain amount
of State supervision through a body such as the Import Duties Advisory Committee or the
Steel Board. Alternatively, and this is the only solution which appears to us
satisfactory, ownership and control can be combined in the hands of the State. . . .
In our view it would be madness for a Government determined to build the nation's
future prosperity on sound economic foundations to perpetuate in this basic industry a
system in which serious clashes on matters of major policy between private and public
interests are bound sooner or later to arise, possibly with the gravest consequences. To
take such a risk would be to fly in the face of common sense and experience. We are not
prepared to endanger the welfare and security of the country in this way. We say in short
that the iron and steel industry shall no longer be distracted by two loyalties.
Schizophrenia is a malady as dangerous in an industry as in an individual. And if it is
said that this malady has not yet reached a harmful stage, I reply that it is far better,
and far easier, to cure it before it becomes chronic. . . .
I now want to say a word about efficiency. Some spokesmen of the steel industry claim
that it is already efficient, and in support of that they say that British steel prices
compare very favourably with those of any other country in the world except Australia.
This argument can only be accepted with serious qualifications. It does not take into
account the effect of our Government subsidies and price controls. I am not sure if those
controls are among those which hon. Gentlemen opposite want to abolish, but I hope they
will tell us if that is so during the Debate. The fact is, however, that if we withdrew
the subsidies on imported ore and scrap-and I may say in parenthesis that the question of
subsidies to this industry is now under review-and if we also withdrew the control price
on scrap, and the British steel industry had to buy its material at the same prices as the
Americans do, then our steel prices would in the main be above American prices, despite
the fact that American wages are much higher. . . .
I come now to the question of the industry's capacity. It is naturally more
advantageous for private owners of the steel industry to have a total productive capacity
below potential demand. They would rather be reasonably certain of being able to sell
limited quantities of products at good prices than risk heavy expenditure on new plants
which might from time to time prove redundant. On the other hand, it is in the interests
of the country and of consumers of steel that productive capacity should be capable of
meeting industrial requirements in peace, and military requirements in war. I am far from
saying that the steel industry should be expanded, regardless of economics, to meet the
peak demand which the most optimistic can foresee in the next decade or so.
But in estimating the steel demand for which we should cater, we cannot -we dare not-be
conservative and cautious as the steel industry has been and is bound to be, as soon as
the present boom conditions fall off. Moreover security against possible aggression is,
unfortunately, still a problem for us, and iron and steel capacity is still the best
single index of the war potential of a modern state. For all these reasons it must be for
the nation and not for private owners to decide what the capacity of the British iron and
steel industry should be, and this again can only be done effectively if the nation
becomes the owner. . . .
We, therefore, propose in the Bill that there shall be an Iron and Steel Corporation of
Great Britain owning all the securities of the major concerns at the core of the
industry-that is, the sections of the industry responsible for the production of iron ore,
pig iron, ingot steel or the hot rolling of steel. These arc the activities defined in the
Second Schedule. The Corporation is empowered to enter the business of steel production
and its ancillary activities, but it is intended that it shall normally operate through
the companies it will own. The Corporation will inherit all the powers the companies
possess in their memoranda of association, but none of the companies can alter its own
memorandum without the consent of the Minister.
The Minister can give the Corporation directions of a general character which appear to
him to affect the national interest. It is, of course, essential that there shall be the
closest co-operation between the Minister and the Corporation on all matters of general
concern. The Corporation must have the national interests, as seen by the Government of
the day, constantly before it. The Minister is able to order that any of the activities of
the Corporation or any, of its companies be stopped or restricted. . . .
The Corporation will be the sole shareholder of every company that on the average of
the years 1946 and 1947 produced more than 50,000 tons of iron ore, produced More than
20,000 tons of pig iron, or 20,000 tons of ingot steel, including alloy steel, and shaped
more than 20,000 tons of steel by hot rolling. . . .
It is also because of our desire to avoid dislocation, and our anxiety to preserve the
most valuable fruits of this industry's past activities and successes, that we propose to
keep intact the identity of the individual concerns. Their personnel and internal
organisations, and such esprit de corps as they may have achieved, will be
unaffected. Indeed, on the morning after vesting day the only difference for them will be
that the ownership of the securities has changed hands. The companies will continue to win
ore, produce iron and steel and sell their products as before. . . .
Let no one suppose because we are here building for the future rather than the present,
and proceeding by evolutionary rather than revolutionary steps, that the proposals in this
Bill are devoid of historic significance. This great reform removes from the private
sector of our economy to the public the industry which is the citadel of British
capitalism. It transfers to Parliament and the community that power to dominate the
economic life of this country which now resides with the steel-masters in Steel House.
It will enable our steel industry, which through its key position could do so much to
lessen the severity of trade depressions, to become an effective national instrument for
planning full employment. It will offer greater security to those who work in it. It will
enable our home consumers to get the steel they require at low cost. It will enable the
Colonies to get the steel called for by their development plans. It will enable us to
co-operate the better with the peoples of Europe in the revival of the industrial
prosperity of that continent and the strengthening of its democratic foundations. It is
for these great ends that we are asking Parliament to Make Britain's iron and steel
monopoly the servant rather than the master of the British people.