Iron and Steel Bill Brings State Control To British Companies

Otago Daily Times, Issue 26917, 1 November 1948, Page 5

Iron and Steel Bill Brings State Control To British Companies

New Zealand Press Association—Copyright LONDON, Oct. 29. About £400,000,000 of invested capital, 107 iron and steel companies, and all their subsidiaries, will be brought under State control by the Iron and Steel Bill, details of which were published to-day. ■'S They embrace all companies annually producing 50,000 tons - or more of iron ore, all firms producing 20,000 tons or more by smelting iron ore into pig iron in blast furnaces, converting pig iron scrap into steel ingots, or shaping steel by hot rolling. Motor car making is specifically excluded. The subsidiary companies to be- taken over produce such things as tennis rackets, printers’ ink, and constructional steel. Compensation for the acquired securities will be made by issue of “ British Iron and Steel Stock,” which will be equal in. value to the securities. Compensation will be based on Stock Exchange quotations on certain dates, on an average of six specified days.

The firms will retain their own names. Reuter's diplomatic correspondent says this is a compromise and the firms will not be submerged in a general anonymity. Altogether, 97.5 per cent, of companies producing ore. 97.6 per cent, of those engaged in smelting, 99.3 per cent, of those dealing with ingots and 93.6 per cent, of those working on hot rolling will be acquired. The Bill says the corporation must pay its way. The total issued capital (including loan capital qualifying for vesting under the Bill) of the 107 companies listed is officially stated to be about £ 195.000.000. It is officially estimated that the amount of British Iron and Steel Stock needed to provide compensation will be £300,000.000. The pai-liamentary debate on the Bill will take several months. The firms which will be nationalised under the Bill employ 300,000 iron and steel workers. . They constitute three-fifths of the employees in the entire iron and steel industry. Controlling- Body The Bill sets up an iron and steel corporation of Great Britain, which will have a chairman and from four to 10 salaried members. The corporation will become the sole shareholder of all firms with an output above a specified tonnage. The firms taken over will be those engaged in the working and smelting of iron ore, .the production of steel and the shaping of steel by rolling. The corporation becomes a holding company for the firms and all their Subsidiaries. Their securities will be transferred to the corporation on May 1, 1950, or any later date up to 18 months after the passing of the Bill as the Minister may appoint. The firms taken over are to remain separate units, to retain their own names and to continue to make use of their goodwill and of all loyalties and special traditions associated with them. Old managements will continue to be responsible, and will be asked to carry out such over-all planning of nationalisation as is considered desirable in the national interest. Free Competition The Bill provides that the firms will be free to compete with each other, as long.as this does not' clash with the general plan of the corporation, which will itself be subject to the directions of the Minister of Supply on questions of broad national interest. The powers of the corporation and the publicly-owned companies for which it will be responsible will be those now existing in the articles of association of each company. The corporation must provide iron and steel at prices, quantities, quality and sizes best suited, in its opinion, to the public need. The corporation's plans for development, training, and research must be on lines approved by the Minister of Supply. The Bill provides that firms whose output is below the specified tonnage will be allowed to carry on without licensing arrangements. Firms in “medium” capacity may expand their production up to the basic tonnage figure for nationalisation or double their present output, whichever is the less, but will have to obtain licences for this expansion. Consumers’ committees are to be set up, the broad intention being that eVery considerable body of consumers shall have an effective committee, which can make recommendations on any problem to the Minister, who is authorised to give directions to the corporation. Corporation’s Power The Bill gives the corporation power to conduct works where is is desirable, and for it to take charge temporarily. Although the corporation will 'take over subsidiary companies, it is given discretionary power to dispose of them, if considered necessary. Each company will be called upon to produce a balance sheet as at present. The corporation may disclaim agreements or leases made between October 21, 1947, and the date of nationalisation. Any transfers by the affected companies betwen the passing of the Bill and vesting day are void, unless approved by the Minister, and assets transferred in that period may be recovered. The corporation, which is liable for the debts of acquired companies, may borrow money with the Treasury’s consent, and can create stock for this purpose. It can purchase land compulsorily and negotiate over machinery for settling conditions of employment. Welfare and efficiency consultations are to take place between the corporation and the Gas Council and National Coal Board over carbonisation developments.