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Steel Industry (Prices)

Volume 640: debated on Monday 15 May 1961

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asked the Minister of Power, having regard to the increase in fuel oil duty proposed in Clause 2 of the Finance Bill, and the increased annual costs of steel making of approximately £5 million and of approximately £10 million for electricity generation, what general directions he will give to the Central Electricity Generating Board, and what steps he is taking to initiate conversations with the British Iron and Steel Federation, with a view to circumventing increases in prices, respectively, for electricity supplies and steel and negativing any possible inflation of power and steel prices; and whether he will make a statement.

None, Sir. Under the relevant Statutes, any variation of the electricity bulk supply tariff and of the maximum prices of iron and steel products to take account of any increase in fuel oil costs resulting from the imposition of the duty are matters for the Central Electricity Generating Board and the Iron and Steel Board, respectively.

Has not my right hon. Friend perceived the ominous signs in the last few days arising from the imposition of the fuel oil duty; namely, an increase in electricity prices of up to 20 per cent.—as manifested by the Eastern Electricity Board's announcement last week—and the possibility of increases in the price of steel of up to 30s. a ton? How could these price increases be consonant with the policy of Her Majesty's Government which so far has been to increase the competitiveness of British industry in the interest of national exports, not to reduce it?

I think that a great many of my hon. Friend's prognostications depend on the price at which oil is available to those two large consumers. I have not been able, in fact, to make any estimate of the effect of the oil tax on the cost of electricity generation because I do not know how much oil will be used with the changed cost which, in turn, will depend on the price at which oil is available. I therefore think that it is impossible to be dogmatic about it until we know the cost to the consumers of the tax on oil.

In considering steel prices, will the Minister look at the price-fixing arrangements in this section of industry and inquire why there are fixed prices for delivery in any part of the country no matter what cost may be in- volved? Will he also look at the prospects of reducing steel prices? I know that they are still lower than those of a great many other countries, but in view of the fantastically high profits which the large steel companies have been making for the last few years, is there not a case for reducing the level of these prices?

As the hon. Gentleman knows, the Iron and Steel Board has a statutory responsibility, and I see no reason—certainly not hypothetically for the future—for interfering with the responsibility that has been placed on that Board by Statute.