Future of Iron and Steel Industry

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Future of Iron and Steel Industry

On 4 April 1946 the Cabinet discussed the timing of nationalisation of the Iron and Steel Industry and which parts of the industry should be nationalised. Some members of the Cabinet thought it would be necessary to decide what was to be nationalised before the matter of timing was agreed.

The following extracts give a flavour of what was said in Cabinet:

E.Sh.

Cd. we not have settled policy before timing or interim arrangemts.

a) Sound note of caution – as at Socialisation Cttee – formula or incantation "natn" is not enough. Must know what is the scheme. What part of the industry is to be taken over? How provide for severance? J.W. needs 12 months to define area for natn. That confirms my fears as expd at Soc, Cttee. Composits undertakgs. – G. Keen & Nethfold e.g. – producg. also engineering products of various kinds. Had trouble over serverance with coal – which seemed easy. Conclude = more time to consider what part of industry shd. be natd

b) Coal = indigenous product. R/ways etc., also. Here, however, dependent on import of raw materials. More diff. therefore to nationalise the industry.
c) Coking coal – as in memo. Seems to be O.K. for 50 years.

d) Interim arrangemts. If you make an announcemt. you must have only short interval before procedg. to take over. In coal, we provided for interim period development: but those i/c industry reluctant to undertake it. Also, uncertainty among employees (esp. higher ranges) who lose all interest in industry. Has happened in coal. The longer the interim period the greater the diffy.

e) Wd. like to see E.B.´s suggn on paper before we decide. Remember you had control system for coal durg. war - & trouble therefore of control w´out ownership.
Must see the end of the road before we speak about the beginning. Think we shd. nationalise this in the end. But not same demand for this as for coal.

E.W.

There is on Tees.

E.Sh.

Because they assume more emplt.

P.M.

Danger about the interval. Must be clear statement of precise & detailed intention. Agree also with E.Sh. that E.B.´s suggn needs examn.

T.W.

Supported E.Sh. – must know what we are going to nationalise. E.B.´s suggn: wd. Control Bd. be able to proceed with rationalisation while preparing for X/ nationalisation. Agree there is now stagnation in mines. Wd. prefer X/ for time being.

J.

Supported T.W. In last Govt. I made investign. Duncan did nothing. Wright was hopeless. But agree must be short interval between announcg. & doing. Wd. therefore prefer a Bd. (to do x/) w´out preliminary promise to nationalise.

E.W.

Against. No industry made subject of closer investigation for natn. Not a step in the dark. Wd. request delay beyond next Session. Much work done; & natn expected. Statement shd. not be merely fulfilment of election pledge – but on basis of business like proposition.

A.B.

"Diffies" will increase with passage of time. Vertical intergration & composite firms will increase. These arguments for p´poning are arguments for never nationalising at all.

P.M.

No. Point is: must be clear in statement what you are going to take over. Argue to ques. of interim period.

A.B.

V. well, I will. The analogy of control w´out ownership in coal durg. war is inapt – because here you will have pledged yourself to Natn. Wd. accept E.B.´s proposal: but do it quickly.

H.D.

Further statement in views of E.Sh.´s statement. Definition of area for natn: not so diff. to decide what to say. Gather J.W. can get better definn if he can discuss with industry on basis tht. central core will be taken over. Essence wd. be tht. we say at once we are going to take that over. A possible (tho´ inferior) alternative wd. be for J.W. on his own to submit quickly his own definition. This Govt. can´t funk nationalising this industry, throughout this Parlt.

E.Sh.

But J.W. said 12 months to get a complete definition.

J.W.

Definition – fairly complete in para. 13. Shorter one para 20. The central core can be easily defined. What will take time is defining exact line of boundary, plant by plant. You can´t get a more precise definition w´out discussions with industry.

H.D.

Hope we can decide to-day to make announcemt. includg. definite decision to natn. Stagnation – we´ve got it now. Devolpment areas. The 3 schemes are in those areas. Economic power: we don´t begin our Socialist advance until we have collared coal & steel. Public utility stuff wd. be done by a capitalist Govt.

P.M.

Work out Control Bd. Announce it: say it will work out natn in detail & carry on m´while with rationalisation.

Taken from C.M. 30(46) - Meeting held on 4 April 1946.