“ILL-CONCEIVED AND DANGEROUS”

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

“ILL-CONCEIVED AND DANGEROUS”

N.Z.P.A.—Copyright Rec. 9 p.m. LONDON, Oct. 30. The Financial Times, commenting on the Iron and Steel Bill, says no private monopoly could be more ill-conceived or dangerous than the mongrel structure proposed. The more the economic and industrial implications are considered, the more frightening they appear. Even the iniquities of she method by which the Government proposes to achieve its ends are less serious than the broader consequences. The Bill is politically and industrially bad. It might have been conceived by a Fabian planner during a nightmare. The practical industrialist, economist, or even shop steward can only stare aghast at its amateurish incompetence. The Financial Times adds that the Bill tacitly admits that the steel industry as a whole cannot be nationalised. It is hard to believe that the measure will not strengthen the conviction abroad that Mr Attlee’s Government is fiddling while Rome burns. The Bill, in short, is thoroughly impracticable. inequitable, superfluous; it 'is a bad Bill; it is the worst Bill of the whole Socialist progeny; it must be thrown-out at the next election. The basis of compensation for iron and steel securities proved art unpleasant surprise for the Inndon Stock Exchange, says Reuter’s financial correspondent. The Bill sets out the basis of compensation as average Stock Exchange prices from October 1 to October 25. 1948, or an average of six months before the general election of 1945, which ever average is the higher. The correspondent says the average for this month will be the operative compensation in most cases. Since the prices of steel shares have been rising, this month, compensation prices are generally somewhat below the prices ruling this morning before the Bill was published. The Stock Exchange had hoped compensation would be a global sum or decided by arbitration, and that this would have been higher than the prevailing Stock Exchange prices. The turnover of iron and steel shares on the exchange to-day was large, and prices moved sharply higher. Business dried up this" afternoon as details of the Bill came through, and prices will tend to fall on Monday. •» The Evening Standard says that investors, from the financial viewpoint, are getting the rawest deal ever handed out by any Government. ■ To apply Stock Exchanges values to steel shares in the manner the Government intends is the height of meanness. Shareholders who lost a large proportion of their capital in the iron and steel industry during the depression are now debarred from participating in the present improvement, when the industry is breaking all records. Reuter's industrial correspondent says that to steel interests tne contents of the Bill came also as a surprise. They feel the Government intends to take over the only certain firms picked from the whole structure of the engineering industry, and that State competition with private firms over the whole wide range of steel and its allied manufacturing industries has found expression in the Bill. They consider the Bill gives the State special interests which may complicate the Government's. guidance and stimulation of industry as a whole. Steel interests describe the measure as a seriously retrograde step in the general encouragement of British industry. Lord Clydesmuir, director of Colville’s, Ltd., described the Bill as “a spinner in the works of in-, dustry.” He added that the whole history of the Government’s treat-, ment of the steel problem betrayed indecision and muddle. Reuter says the Bill will be hotly opposed at every stage in Parliament. The Conservative Trade and Industry Committee will begin a detailed study of the Bill as a basis for what will virtually be a line-by-line attack on it. . „ ! Conservative members insist that the Bill “ follows the classic pattern of all nationalisation Bills, and repeats every mistake made in the others.” They regard the powers of the Minister as "ominously sweeping.” They contend that there is no provision to ensure that competition between private and public enterprise will be fair. , _ The Attorney-general. Sir David Maxwell Fyfe, said: “ The Government is deliberately stirring up the bitterest political fight of Parliament.” Reuter’s financial correspondent says British iron and steel officials did not expect nationalisation would disturb overseas holdings, but official quarters are dubious. Business quarters ; suggested that some countries might find it unpalatable to have important stakes in the most basic industries ultimately owned by a British body, particularly as the individual companies which ' own the overseas assets, are to become subject to planning avowedly in the British national interest. They argued that people abroad might differentiate between a British official body and a body of private British investors, while the British national interest might differ from the national interest of overseas countries concerned. The British Corporation has power to divest itself of any subsidiary assets of nationalised companies. It has been indicated that this will be done only sparingly.