Controls and Committees

A machinery for the control of raw materials was being actively considered for some years before the outbreak of war. Arrangements were discussed with advisors drawn from the trades dealing in each of the materials considered to be "critical"; and when the time came to set up the controls, both the controllers and the staff were re-cruited from the firms, associations and other bodies in the trade.1 In some cases, the trade association or commercial organisation was itself transformed into the control. The British Iron and Steel Federation, for example, became the Iron and Steel Control, and the British Metal Corporation became the Non-Ferrous Metals Control. If output was effectively in the hands of one firm—asbestos, industrial alcohol and bromine—the monopoly was constituted as the control, subject of course to the jurisdiction of the Ministry of Supply; and when there was neither large firm nor adeąuate trade association, the control was organised by leading figures in the trade and staffed from the trade. Controls were set up in this way for wool, timber and leather. In the case of some of the lesser controls the Ministry of Supply acted as the controlling authority; but the rule in generał was to leave the control in the hands of the trade. The policy was deliberately chosen. Only those experienced in the trade would have had the necessary technical skill and it had been felt too that "a controller drawn from and enjoying the confidence of the trade was the man most capable of obtaining the maximum support of the trade for the war effort".2 The controls were not limited to distributing materials. They also undertook responsibility for the supply. Most of the raw materiał controls soon developed into trading controls, purchasing abroad and arranging for imports; and in the field of domestic supplies, the controls among other activities, either directly or in partnership, entered into the home timber business, into the winning of iron ore and the search for non-ferrous metals.3 1 Hurstfield: Control of Raw Materials, Chapters IV, XXIV and XXV. 2 Ibid., pp. 70 and 393. 3 Ibid., p. 386. The branch arranging before the war for the control of materials had been a Supply Organisation established in the Board of Trade. Some consideration had been given to the creation of a special Ministry of Materiał Resources to be generally responsible for the supply of all raw materials. This proposal was not proceeded with, partly, it appears, from the difficulty of distinguishing "raw" from other materials used in production. The Supply Organisation instead was formed within the Board of Trade. This branch in 1939 was transferred to the newly-formed Ministry of Supply and reconstituted as the Raw Materials Department. The controls were to be the executive authority. They were to issue the licences without which controlled materials could not be acąuired; but it had been no part of the original scheme that the materiał controls should themselves be responsible for the policies governing the distribution of supplies. Yet this is how it appears to have been. Policy, expressed in the allocations between users and uses, was formed as a conseąuence of the issue of the licences. "It is not elear", writes the historian of the raw materiał controls, "that at any stage in the war the writ of the Ministry (of Supply) ran unchallenged throughout the whole field of controls" and the historians of the Board of Trade include among the obstacles impeding the export drive in the early days of the war the "unco-operative and even actually hostile attitude of many of the raw materiał controllers".1 The controls, as the war wore on, assumed a "far greater measure of independence especially as the gathering momentum of the war in any case determined that they should enjoy much greater powers". Procurement of supplies, the finance of purchase and the price of issue were all safely in the hands of the Raw Materials Department of the Ministry of Supply. But it was the controllers who acąuired and often owned the materials, and it was they who arranged for distribution by the issue of licences. The R.M.D. were never able, for one reason and another,2 to exert a controlling authority over the controllers in the matter of distribution. Central direction over the allocations, such as it was, came instead to be exercised by the inter-departmental materials committees. Established first in the Ministry of Supply and later transferred to the War Cabinet Office and then to the Ministry of Production, these committees adjudi-cated upon departmental claims as the inereasing scarcities caused 1 Hurstfield: Control of Raw Materials, pp. 411-12; Hargreaves and Gowing: dvii Industry and Trade, p. 43. 2 All instructively set out by Hurstfield: Control of Raw Materials, Chapter XXV. demands for the more important materials greatly to exceed the supplies. The materials committees allocated what was available between the departments; and it was left to each departmerit to decide, among the claims submitted, which could be met out of the departmental allocations and which could not.1 Licences remained in use, in the case of some allocated materials, but they were a subordinate piece of machinery. Demands had to be sub­mitted to the controls by each consumer; but the controls themselves normally took no part in determining how far a given demand was essential. Not all materials however were brought within the active interest of the materials committee and in respect of some, the committee did not intervene until "comparatively late in the day". Controllers in so far as they were thus left to their own devices, had to apply their own principles and work out their own practices. The ultimate use of materials not yet (and never to be) brought within the jurisdiction of the committee was determined by the control; and the controllers continued to have imposed upon them the responsibility and the burden "for decisions as to consumption . . . which were alien to their function".2 The Raw Materials Department after the war went back to the Board of Trade; and then to the short-lived Ministry of Materials in 1951. The Labour Government shortly before their fali had established that Ministry in part to meet the emergency created by the sudden worsening of supplies of raw materials after the hwasion of South Korea. The duties of the new Minister were vaguely defined in a White Paper "to do everything possible to ensure adeąuate supplies of the materials" with which he was con­cerned; but responsibility for the allocation of raw materials remained with the Chancellor of the Exchequer as a "part of his functions of co-ordinating economic policy". The Ministry of Supply retained the distribution of steel and the detailed allocation of materials between individual firms continued to be "determined by, or on the advice of the departments concerned with the particular uses sińce it is these departments which have the knowledge of the importance and naturę of the activities of individual firms on the basis of which these detailed allocations should be determined".3 ^elow, p. 73. 2 Hurstfield: Control of Raw Materials, pp. 413-14; Hargreaves and Gowing: CMI Industry and Trade, p. 452. 3 Cmd. 8278. Government during the war was the biggest buyer of the product of industry, the source, or at least the controller, of most raw materials and the finał arbiter of many a firm's opportunity to stay in business. Firms, industries and groups of industries naturally tended, and were officially encouraged, to make the department buying their product or issuing their raw materials the channel through which they conducted their business with Government. To each department there thus became attached a group of industries for which the department in ąuestion acted as "sponsor" in their affairs with and applications to other Government departments. Sponsorship, an innovation of war, was found a useful institution in peace as long as the controls and restrictions were continued; and it remained as an addition to the administrative machinery, as long as Government continued to be deeply interested in economic affairs.1 Most departments before the war had not developed outside London, nor, indeed, outside Whitehall. The Ministry of Labour and the Post Office, each with an immense volume of local work, were the exceptions. The larger departments of state soon began to establish Regional Offices often headed by a Regional Controller in each of the standard regions into which Great Britain had been divided for purposes of civil defence in 1939. The regional organisa­tion during the war formed an essential link between the departments and business. It was through the Regional Offices that most firms approached their sponsors and it was upon the Regional Offices that Headąuarters in London became accustomed to refy for information and often guidance in most of the cases which came before them, at any rate in those involving particular firms. The Regional Offices served a necessary purpose during the war when so much of the firms' business was transacted with Departments and these con­tinued after the war as the channel through which firms applying for licences sought the support of their sponsors. They performed 1 The relations between government and industry are discussed in Part IV of the Report of the Committee on Intermediaries (Cmd. 7904) and in the P.E.P. Report on Government and Industry, Chapter V. "Sponsorship" is described in great detail in the latter but in terms which, in the opinion of the author, over-estimate the importance of the institution to private business. The interested reader may care to turn to p. 108 for an amusing example. There it seems to be implied that a firm "with a factory in an out-of-the-way place want(ing) additional transport facilities" would first apply to its sponsor. A transport manager's normal response in these circumstances would surely have been to ring up the nearest suitable transport undertaking—or buy himself a new lorry, an enterprise for which no licence was needed! other functions too1—but, as time wore on, there remained little of this business which, in the opinion of their industrial clients, could not be conducted just as well or better with departmental headąuar-ters in London. Most of the important decisions were being referred to London. It was the opinion of industry, soon after the change of Government in 1951, that, with the relaxing and lifting of the controls, the usefulness of the Regional Offices had come to an end and much of this organisation has now been dissolved. The legał foundations upon which were erected the fabric of licence, allocation and control are the Defence Regulations. First issued under the emergency legislation passed on the outbreak of war, these Regulations were continued by the Supplies and Services (Tran-sitional Powers) Act of 1945. That Act gave H.M. Government power to enforce, for a further period of five years, those defence regulations deemed necessary or expedient, among other purposes, for "maintaining, controlling and regulating supplies" essential to the well-being of the community; for "eąuitable distribution" or "availability at fair prices" or "to facilitate the readjustment of industry and commerce to the reąuirements of the community in time of peace".2 The Labour Administration which was returned in 1950, promised in the Speech from the Throne the permanent enact-ment of this measure. No such Bill was introduced during the Session for which Mr. Attlee's second administration held office. The Act was renewed in 1951 and was re-enacted annually, as the legał sanction for those controls which had not yet been lifted nor continued under authority of other and less temporary Acts of Parliament. 1 The purposes for which, after the war, firms were accustomed to resort to the Regional Offices of the principal sponsoring departments were the following: to the Board of Trade: Overseas market conditions; overseas representation; export credits; clarification of matters relating to import licensing regula­tions, or export licensing reąuirements; support for building licences; the Ministry of Fuel and Power. Allocation of fuel supplies; submission of re­turns of fuel receipts and consumption; power problems; assistance in modernising plant to achieve fuel economy; the Ministry of Works: Obtaining of building licences for works' extensions and maintenance; the Ministry of Supply: Inspection in connection with Government contracts; support for building licences; assistance in obtaining machinę tools and plant; and the Ministry of Housing and Local Goternment: Building and building main­tenance licences; development of company housing schemes. 2 Supplies and Services (Transitional Powers) Act, 1945, pp. 1-2.