Wanganui Chronicle. DECEMBER 7,1949 THE IRON AND STEEL ACT

Wanganui Chronicle, 7 December 1949, Page 4

Wanganui Chronicle. DECEMBER 7,1949 THE IRON AND STEEL ACT

THE passing of the Iron and Steel Act by the United Kingdom Parliament proves the value of a second Chamber when that. Chamber has an existence of its own. Herein the House of Lords differs from the Legislative Council in New Zealand which, in recent years, merely reflects the Government of the day.

The Iron and .Steel Act was passed in the teeth of opposition, both inside and outside the House of Commons. It provides for the nationalising of the iron and steel industry at a point of time when the nationalising of the coal industry has not moved beyond the initial stages; and the nationalisation of railways appears to be a gamble with public funds to secure State ownership, but which has already gone wrong. Not only is it felt that the nationalisation of the iron and steel industry is too hurried, but it presents administrative difficulties that will be accentuated rather than solved by fhe policy of nationisation. The basic objection to the nationalisation of any industry is that it establishes monopoly conditions, which conditions foster inefficiency. This does not mean that the individuals who work in such industry do not strive to attain good results: but that the system under which they work tends to become wasteful. Supervisory costs mount up and head office decisions having to be obtained slows down action, while the secondary system has to be more elaborate the larger the organisation. Commercial trusts meet these problems by creating internal competition, but this policy does not, from experience, appear to be practicable in a. nationalised industry. The railway systems of the United Kingdom have been loss producing and there is little prospect of their producing a profit. The coal-mining industry has not yet been fully reorganised. Why not wait until these problems have been solved 1 asks the opposition before extending nationalisation. That, there was sound reasoning here eannot be doubted, for it is already apparent to Mr. Attlee’s Government that, it has not at its service sufficient men of high executive ability to cope with the problems which follow in the steps of a nationalisation programme.

While it is true that the nationalisation of the coalmines of the United Kingdom has been recommended by the Royal Commission on the Coal Industry and the step was given widespread support—chiefly to secure the abolition of the payment of royalties to private surface owners—the industry was also considered suitable for nationalisation because the extraction process produced the finished article. The problems involved were reduced to a minimum, hence the difficulties to be apprehended were relatively few and small. The coal industry has, nevertheless, provided a full harvest of headaches, particularly on the top stratum of administration.

The railways, on being nationalised, have proved a veritable hornets’ nest of trouble for the Government. Not only have the members of the public formed the habit of addressing to the Government complaints concerning transport inconveniences but the trades unions have complained at the lack of ability in the Government’s nominees to the board of control. The nationalisation of the railways has been advocated on the ground that it would eliminate competitive train running and wasteful solicitation of business. This advocacy therefore precluded the continuance of the competitive team spirit. Monopoly now rides the railroads, and the public pays either as rail user or as taxpayer. But for all that the railways do provide the same service along the prepared tracks, which are the most economic means of solving problems of bulk or heavy haulage. When it comes to the iron and steel industry, however, conditions are not parallel with either the coal or railroad industry. The two latter are service industries, servicing power and haulage. Iron and steel are the base products for a very large proportion of Britain’s manufacturing- industries, each of which has its own particular requirement. Further, there is a return of metal to the market and many commercial formulas consist wholly or in part of mixtures of these returned metals. For instance, so many trucks of horseshoes and so many railway carriage axles give the metal desired for certain specific uses. The iron and steel industry is a highly complicated one. It has grown up to meet many specific needs and it is this diversity which makes the nationalisation of the industry so full of difficulties and consequently so hazardous a venture. If it proves to be once again true that nationalisation leads to, higher production costs then a handicap will be placed’ upon the whole of the engineering and light and heavy metal industries of the United Kingdom and this at a time when Britain must export or perish in a world of increasing competition.

Faced with such a situation, the House of Lords insisted upon the operation of nationalisation being delayed until after the holding of a general election. The proposal was probably never contemplated by the vast majority who voted at the general election in 1945. If the project is made an election issue of the first importance and the public endorses it, then it can be said that the experiment has the backing of the majority. As it is now the support. which the public would accord it is unknown. The House of Lords, by insisting that the people shall be consulted, has proved itself to be the protectors of the democratic principle. For such action it deserves the respect and esteem of the nation.