BRITAIN’S INDUSTRY

Grey River Argus, 28 August 1946, Page 3

BRITAIN’S INDUSTRY

Future of Steel NATIONALISATION QUESTION , LONDON, August 2'2. Mr. Norman Crump states:— On August 20 the British Government issued an important statement on the steel industry. It recalled the Minister of Supply’s statement in Parliament last April to the effect that the Government had decided to appoint a Board, to be responsible to the Minister for general supervision and control of the industry. It paid a tribute to the assistance subsequently given by Dr. Van der Bijl, Chairman of the South African Iron and Steel Industrial Corporation, and it regretted that Dr. Van der Bijl had not been able to accept the Government’s invitation to become the first Chairman of the proposed British Board. The statement then came to its main point. It would not be the function of the proposed National Steel Board, or the steel industry members of it, to advise the Government in connection with plans for public ownership. That was the duty of the Government, and would be treated as a separate matter. The Iron and Steel Federation, the statement continued, had intimated that the industry would associate itself with membership of .the Board on this basis, and would press on with the modernisation programme with all possible speed. The Statement concluded wi.th an announcement that the names of the members of the new Board would be announced shortly. All this helps to clear up a somewhat complicated position. Relations between the British Government and the steel industry became close as long ago as 1932, when the industry first received a protective tariff against foreign competition. ' In return, it undertook to adopt certain measures of re-organisation. During the war, the steel industry like most other industries passed under Government control and worked mainly on orders connected with the war. Another consequence of the war was that many of the industry’s plans for development had to be deferred. Furthermore, plants were worked to the limit of their capacity and endurance.

Meanwhile, the industry itself was looking ahead and prepared farreaching and, in some respects, drastic plans for its post-war reconstruction. These crystallised out into a report, which in response to the invitation of the then Coalition Government, the industry prepared and submitted. The text of this report was published last May. It envisaged capital expenditure to an amount of £l6B million. This money was to be spent during the next seven years. These proposals embraced the overtaking of war arrears of development; the expansion of steelmaking capacity; and concentration of various forms of production into units' of sufficient size to be; efficient. The industry felt that, it could raise half of this £l6B million from its own resources, and though the report did not specifically say so, there is no doubt that the remainder could readily be raised through the market. All this seemed straight-forward enough, but then the question of nationalisation of the industry arose as a complicated factor. On April 17 it was announced that a large measure of public ownership had been decided upon by the Government, and that legislation for this purpose would be prepared. MeanWhile, this announcement continued, discussions would take place to ensure that urgent modernisation and development schemes were carried out without delay. The Government’s intention at that time was to form a Board, on which the steel industry would be fully represented. for the dual object of launching development plans and of advising the Government how to nationalise the industry. The Government was not able to announce a nationalisation scheme in detail, nor to say when it would be introduced. Nor was there any indication of the compensation terms which would be given to the present, proprietors. In these circumstances the leaders of the steel industry could hardly be expected to join a Board which, in effect, was' to be charged with the duty of acting as their executioners. Nor did the atmosphere of uncertainty created by the Government’s declarations make it easy to press on with the financing and carrying out of the industry’s modernisation and development plans. It was necessary to escape from this impasse without delay, for the plans for the industry were being held up and there was a danger that British steel might fail to re-establish its position in the world’s markets. For the next year or two ahead, a worldwide shortage of goods of all kinds will persist, and manufacturers will enjoy the benefits of a seller’s market. But this state of things is unlikely to continue • indefinitely. Therefore, the British steel industry had only a limited period ahead of it in which to carry out its plans. The real meaning of this statement of August 20 is that it begins the breaking of a way through this impasse. The Government recognises that the leaders of the steel industry cannot be expected to act as their own executioners. Nationalisation, therefore, is to be a matter for the Government and Parliament and not for the new Steel Board. In return, the steel industrialists will join the Board and press on with their modernisation plans, despite the uncertainty created in their own minds by the prospect of nationalisation. That is the position to-day. First things are to come first, and' the immediate objective is to make the industry even more efficient than it has been in the past.