asked the Minister of Supply for what reason his Department increased the price of copper by £16 per ton on Tuesday, 22nd August, and reduced it by the same amount on Thursday, 24th August; and if he is aware that these sudden changes created great industrial dislocation.
The United States export price, on which our buying prices are based, went up by 2 cents on 21st August. In accordance with the policy of keeping United Kingdom selling prices in line with those in the American market the Ministry of Supply selling price was increased from 22nd August by the sterling equivalent of £16 a ton. The American price went down again on 23rd August, and the Ministry of Supply price was reduced accordingly the following morning. If the Exchequer is to be adequately protected, it is not possible to give prior notice of changes of this kind.
Is the right hon. Gentleman aware that enormous inconvenience was caused to many firms who had to print notices indicating the effect on the prices of their commodities, as the change back to the original price was made in many cases before they could post them?
I appreciate that these rapid fluctuations in price are very inconvenient, but industry has said that they are fully satisfied with the policy of keeping our price in conformity with American price. If that changes rapidly we have to change ours.
asked the Minister of Supply what proposals he has to compensate exporters of heavy electrical equipment, who need to cover their requirements many months ahead, for having to pay the premium on their forward purchases of copper, which he has imposed in order to prevent speculation.
The premium was imposed to protect the Exchequer from the results of heavy forward buying at a time of great uncertainty about future buying prices. The matter is under discussion with industry to see whether an alternative method can be found which would be more acceptable to the trade while providing the necessary protection to the Exchequer.
Will the right hon. Gentleman bear in mind that this fine on forward purchases of metal is no deterrent whatever to the speculator but is a serious burden on productive industry, on which the export trade depends?
It is inevitable, if it is likely, or almost certain, that the price is going to rise rapidly the next day, that the purchaser should pay a premium to cover the Exchequer against a very substantial loss which would otherwise be imposed upon it by substantial buying on that day.
Why was not the trade consulted before the premium system was introduced?
It would have been exceedingly awkward for the trade because if, after consultation, someone, perhaps perfectly properly and innocently, bought large quantities, it might be suggested that it was as a result of the prior information given by us.
Does not the discount in other world markets in metal impose an extra burden on the manufacturer here if he has to pay a premium?
The hon. Gentleman will appreciate that this facility of buying considerably ahead is confined to purchasers in this country. American consumers have not that facility at all.
Does the right hon. Gentleman's answer mean that he is considering imposing this forward buying premium only from day to day and not, as it is at the moment, permanently?
I am considering the whole problem, which is a very real one, with the industry to see whether we can find a solution which is satisfactory to all of us.