CAB129-53 — Page 236

United Kingdom manufacturers are proposing to tender but there is uncertainty in the minds of the Indian Railway authorities whether the United Kingdom can meet their needs due to difficulties and delays which have already arisen over steel supplies for orders already placed with United Kingdom manufacturers under an agreement to supply 200 engines, and various parts for assembly at Chitteranjan works, over a period of five years. Difficulties arise largely from the competing claims on limited rolling capacity for steel for this and for other production (including defence).

Telephone equipment manufacturing project. General Electric Co. Ltd. negotiated for three years but the contract fell through because of the heavy penalties for any delay in completing by the due date, which G.E.C. did not feel able to accept in view of present material difficulties, Pakistan Government have now signed an agreement with Siemens and Halske of Munich. This closes the Pakistan market to the United Kingdom as far as telephone equipment is concerned, and it is expected that two further tenders for exchanges of 5,000 lines in Karachi and 2,000 lines in Dacca will go to Siemens.

Havelock Engineering Co. were interested in erecting and equipping a factory for the manufacture of welding electrodes pro- posed by the Pakistan Welding Electrodes. No assurance could, however, be given that the electrode wire required could be made available, owing to defence and other requirements in this country. The Swiss firm of Oerliions competed and were able to promise assistance in obtaining raw materials (i.e. wire to be used in the factory - 900 tons per annum). The Swiss firm got the contract, though their price was higher.

Not stated

but would

be several

£ million.

£200,000

£450,000

:

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C. (52) 246

CABINET OFFICE RECORD COPY

65

COPY NO.

18th JULY, 1952.

CABINET

THE IRON AND STEEL INDUSTRY

Memorandum by the Minister of Supply

As requested, I submit a draft of the White Paper on iron and

steel, revised in the light of the Cabinet's discussions.

2.

So as to give greater prominence to our proposals for the public supervision of the industry as distinct from those concerned with the transfer of ownership, the order in which these two sections are presented has been reversed.

3.

If it should be decided to make some reference to the Government's desire for an agreed settlement of this problem, I suggest that, when the White Paper is issued, a statement on the following lines should be made:

"The Government believe that the proposals set out in

the White Paper offer a reasonable and workable solution to the problems of supervision and ownership in the iron and steel industry. At the same time, they recognise the importance of lifting the iron and steel industry out of the arena of party controversy. They are therefore prepared, between now and the introduction of the Bill, to consider sympathetically any constructive amendments which would provide a basis for an agreed settlement. "'

Ministry of Supply, W.C.2.

18th JULY, 1952.

D.S.