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Drafting the Programme

MOST people find, as a generał rule, that they would like to spend, in sum, more than they can afford. Without some examination of a projected expenditure in relation to the means, there is no guarantee that income is spent to best advantage, no assurance, in fact, that first claims have been met before the less important are satisfied. The same purpose, of conserving scarce supplies for the most important uses, is served by an economic budget or a materials programme. The supplies of raw materials or other resources likely to become available within the period con-stitute income. Expenditure is represented by the sum of the reąuire­ments for the commodities or resources in ąuestion. Shortages show themselves as an excess of reąuirements (expenditure) over supplies (income). No greater part of the reąuirements can, in fact, be satis­fied than the supplies will allow. Hence the need for a detailed review of reąuirements, to make ąuite sure that none of the scarce and therefore precious supplies are wasted in providing for less urgent reąuirements before demands for the more urgent have been met. The drafting of a budget or programme began generally in the government department sponsoring the industry or otherwise re- sponsible for the supply of the materiał in ąuestion. The ąuantities reąuired for ofncial work to be put in hand by the department either directly or through subordinate authorities were estimated by pro- duction branches of the department itself. The reąuirements of nationalised undertakings were obtained either directly or through the appropriate sponsoring department. Needs arising from the demands of private business were provided by the control responsible for granting licences or permits to acąuire the materials, or by the department sponsoring the consuming industry. Applications from private business for licences to acąuire supplies of scarce materials generally took the form of a statement of reąuirements for some ensuing period of time, three, four or six months. The applicant was often asked to divide his reąuirements between different categories of output, for example between home and export markets. He was also asked to return the amount consumed in the last period and, if the shortage were severe, to declare his stocks. Some allowance would have to be made for an expected increase of output from firms in one controlled industry, particularly when their finished product was the raw materiał of others. But little weight appears to have been placed upon applicants' own statements of reąuirements for futurę production.1 The condition of stocks and consumption in the past, together with their own impressions of the progress of the industry, were the bases upon which licensing authorities generally assessed the volume of supplies reąuired to satisfy demands in the forthcoming period arising from the expected consumption of private business. Reąuirements for these several purposes, submitted by production branches, controllers, regional offices and branches were assembled in each sponsoring department. Statistics of stocks were collected, and forecasts of supplies prepared, by the department or control familiar with the industry or sources at home or overseas from which the materials were being obtained. Statements comparing reąuire­ments and supplies were finally drawn up by the department or control furnishing the supply or sponsoring the principal consumers. These statements, now containing all the statistics needed for a budget, were passed to all "using" departments, to any others con­cerned in the allocation and distribution of supplies and to the Central Economic Planning Staff, before whom departments had to defend the claims they were making for official work they themselves had authorised, for work to be undertaken by the nationalised under-takings and for work to be done under licence by the industries they sponsored. Their scrutiny complete, the Central Economic Planning Staff (C.E.P.S.) forwarded the departmental estimates of reąuirements, together with their recommendations, to the chairman of the inter- departmental materials committee, successor to the wartime com- mittees of much the same name.2 The constitution of the committee was informal and ad hoc. All departments and branches were represented which had any interest in the commodity, either as consumer, sponsor, controller or supplier, or in any other capacity, for example, as statisticians or planners. The membership was wholly official and the chair (during at least the tenure of office of Mr. Attlee's Administrations of 1945 and 1950) was taken by a junior Minister. The committee, as such, was advisory—the executive authority lay with the chairman. Having before him the detailed 1 Below, p. 132. * Above, p. 69. estimates of all the accepted reąuirements on the one hand and on the other the expected supplies and the recommendations of the C.E.P.S., the chairman could prepare a provisional scheme of alloca­tion. This was presented to the committee sitting in fuli session. Each consuming or sponsoring department or branch was there to justify and defend the assessment of reąuirements for themselves and their clients; each supplying department or branch contributed ele­ments of information about the ąuantities available; and the statis-ticians and planners were able to criticise the consistency of the figures both in themselves and with other related programmes. Discussion in the committee was mainly occupied with those depart-mental claims, so large that they could not be met except at the expense of ąuantities allocated provisionally to other departments. Smali claims were generally provided at the chairman's discretion, from a reserve held back for this purpose. Really smali demands from consumers not reąuiring more than a certain very limited weight or value were excluded from the allocation altogether and satisfied from stock holders' margins. An allocation of scarce materials between claims authorised and sponsored by the several departments implies a scheme upon which the supplies are distributed. The schemes may vary from one mater­iał to another and from one time to another. Some may follow from a Cabinet direction that particular materials are to be conserved for specific purposes considered to be essential to the national welfare, e.g. housing, export to hard currency areas, or rearmament; others may rest upon nothing more elaborate than the relative proportions in which similar claims have been satisfied in the past. But whatever the policy may be and wherever in the Government machinę it may have been formulated, whether in departments, before one or other of the inter-departmental committees, by the Lord President or by Ministers as a group, the finał decision under the British system rests collectively upon the Cabinet. The more important conclusions are announced in Parliament and often debated; some are docu-mented by the issue of a White Paper. The group of responsible officials who attended these committees were thus well aware of policy and the underlying reasons—they or their colleagues were often responsible for drafting the papers considered by the Cabinet at those meetings in which that policy was born. Discussion in a materials committee might be prolonged and pointed; but the pro­grammes had all been prepared within a framework laid down by the Cabinet, and the chairman, being a Minister himself, could certainly speak to his colleagues' intentions. The wider and more contentious ąuestions were consequently excluded and the examina-tion of reąuirements and supplies confined by the fact that all present accepted the generał premises upon which the priority of the reąuirements should be assessed. When objection and suggestion had finally been exhausted all parties present had reached a common measure of agreement upon the bases of estimate; upon the reason-ableness of the statistics themselves and upon the order of priority in which the several reąuirements should be ranked. Such a pruning of claims, indeed, often took place during these sessions that the ąuantity available was found sufficient to cover all the acceptable demands! But this did not always occur. The minimum total assessment of reąuirements remaining, after every possible economy had been exhausted which the ingenuity of the chairman and of the other members of the committee could suggest, sometimes exceeded by a more or less considerable margin the maximum foreseeable rate of supply. In this case, sińce all reąuirements could not be met, some had to go unsatisfied. There was clearly not enough to go round. The limited supplies were then applied to the satisfaction of the more urgent reąuirements and the less urgent denied until both sides of the account—reąuirements and supplies—were brought into balance. The budget balanced and the allocation made, departments were able to distribute the shares of the scarce commodity between the claims respectively of work directly authorised by the department; of the nationalised industries, if any, for which the department spoke; and of the private businesses sponsored by the department. The subdivision was the responsibility of departments and con­trollers; but it might not be wholly in their discretion. The chair­man of the materials committee, in making the allocation, might have indicated how much of each generał class of reąuirements or of reąuirements for particular purposes, if these were sufficiently large, should be satisfied out of the whole ąuantity of materiał allotted to the department in ąuestion. But if there were no such directions (and they were by no means universal nor all-inclusive) the finał distribution of each departmenfs allocation to those who were going to use the materials was left to the good sense of the departmental officials and of those staffing the control—and there was at least the possibility that the construction placed on their duties by officers of departments, branches and controls might not always conform very precisely with the policies guiding the allocations between departments framed by the materials committees. The control or other authority issuing scarce materials under licence to private industry could now be informed of the gross ąuan­tity he would have to distribute between applicants. Provided that the apparent shortage, the excess of reąuirements stated by clients over allocations was not severe, no really serious difficulties arose over the issue of licences. All claimants got very much the ąuantities for which they had asked and there were no awkward complaints. Most applications, in any case, were framed with an eye to possible economies which could be drawn upon should any specific object have been struck out of the allocation; and most controllers (if they were wise) held back a reserve sufficient to satisfy claims the refusal of which might constitute a elear grievance. It was only when the materiał was really scarce in relation to demand at current prices that controllers had to consider seriously which things in the circum-stances of the times really ought to be put first. Reąuirements then had to be classified according to the priorities suggested by their instructions or by their reading of current policies; controllers in these circumstances had to make up their minds how to divide the supplies at their disposal and had to decide the embarrassing ques-tion—how much each of their clients was going to get and for what purpose, knowing that there was not nearly enough to satisfy all and that a disappointed applicanfs reading of the priorities was unlikely to coincide with that of the control! This generał account of the practice of allocation by budget and programme may usefully be enlarged by a review of the manner in which supplies of steel were distributed between consumers before the (first) lifting of the control in March 1950. Most non-official and privately-owned industrial and commercial users of steel were sponsored by the Ministry of Supply. Applications for licences were made, in the first instance, to the appropriate branch of that depart­ment. These branches in turn furnished the Principal Priority Officer of the Ministry of Supply with estimates of reąuirements, both for official work authorised by the branch on behalf of the Ministry and for sponsored private users. The estimates, in some cases, were based on the targets which the particular industry had been set or had accepted. This method assumed (not always with reason) that other complementary materials were available. In other cases, reąuire­ments were based on past performance raised by an amount appro­priate to the expected increase in output of the industry or firm. The estimates were examined by the Principal Priority Officer in consultation with other branches of the Ministry. The minimum ąuantities needed to meet all claims for work sponsored and author­ised, once agreed upon within the department, were accepted as the reąuirements which the Ministry were prepared to press upon the C.E.P.S. and the materials committee. Other departments had similarly prepared estimates of the steel reąuired for the official work they proposed to authorise, for the needs of the nationalised undertakings attached to them and to meet demands from firms in the industries of which they were the spon­sors.1 All these demands for steel, assembled by the several depart­ments, were passed to the Central Economic Planning Staff for detailed scrutiny. Reąuirements were assessed for a ąuarterly period in advance. Forecasts of the supply in prospect for the same period were furnished by the Iron and Steel Division of the Ministry of Supply. Estimates of home output were provided by the British Iron and Steel Federation and to these were added the amounts available from direct imports, from Government surpluses and so on. The budget when complete was passed to the chairman of the materials committee, together with any recommendations and sug-gestions which the Central Economic Planning Staff desired to make. The provisional allocations arising from this first study of the budget were then presented by the chairman for the detailed consideration of the fuli committee, representing all claimant departments, assisted by the Central Economic Planning Staff, the Economic Section of the Cabinet Office, the Central Statistical Office and the Iron and Steel Division of the Ministry of Supply. Reąuirements were divided into categories—for motor-cars, for commercial vehicles, for locomotives and rolling stock, tin-plate for export and for home consumption, internal combustion engines, cranes and excavators, mining eąuipment, machinery and so on; for power stations, for hand and machinę tools, aircraft, maintenance of manufacturing industry, etc, etc. Division by use and description of output indicated those reąuirements and parts of reąuirements which, on the prevailing scalę of priorities, should be ranked first and those which came second, a degree of elaboration which was clearly necessary if the allocation was to be guided, as it obviously had to be, by the current scalę of priorities. In addition, reąuirements for raw and semi-finished steel were grouped by specification. The shortage of steel varied from one class of product to another. The capacity of some processes was more limited in relation to the demand than others and the scarcity of these particular types of raw and semi-finished steel was correspondingly more acute. Wire, strip, sheet and tube and certain types of alloy, continued to be scarce for 1 For the complete list, see Iron and Steel Distribution Scheme: Notes for Con-sumers, issued by the Iron and Steel Board, Ministry of Supply. (H.M.S.O.) this reason. Castings, for example, soon became relatively plentiful and were early freed from control. Sheet, however, remained scarce to the end and subject to allocation until the new continuous strip-mill at Margam had been brought into production. Steel was allocated to departments in three (previously four) main groups: plate (tin, terne and black); steel sheet, coated or uncoated, under 3 mm. thick and over 18 inches wide; and generał (i.e. all other) steel.1 The materials committee might also direct how much steel should be devoted to this or that particular reąuirement in a departmenfs programme. But in the absence of any specific direc-tions, departments were free to decide how their share in each of these groups of steel products should be divided between sponsored industries, nationalised undertakings and authorised official work; and it was their responsibility to make this sub-allocation. The distribution of steel allocated to building, a large reąuirement of high priority, was in the domain of the Ministry of Works. The head-ąuarters building committee of that Ministry reallocated the tonnage allowed for building purposes between departments and reported the allocation to the materials committee. In the case of a claimant for steel as large as the Ministry of Supply there was the further problem of subdividing the depart-mental allocation as a whole between branches and between the clients of each branch. This task devolved primarily upon the branch responsible. Unless otherwise directed, heads of branches looked at the amount consumed in past periods and at any changes in stocks. They also took into account alterations of policy and in priorities. But the consideration which above all seems to have guided officials in their decisions was the opinion which they and their assistants had formed about the position and prospects of each of the firms under their care. The authority to acąuire steel was issued by the department spon­soring the work. Firms and others wanting steel stated their stocks, consumption in the last period, ąuantities and types of steel reąuired and sometimes the description and destination of output. Once issued by the sponsoring department the authority was passed to the supplier and from him to the Iron and Steel Division of the Ministry of Supply as a delivery against the issuing department's allocation. The holder of an authority might buy from whom he chose. The presentation of an authority did not constitute an obligation to supply steel of a given specification and in a certain ąuantity. Producers and merchants were free to sell to whom they 1 The fourth group had been iron and steel castings. pleased and in the ąualities and to the specifications which they could supply. The authority to acąuire conferred only the right to buy a certain ąuantity of steel in one or other of the broad groups in which the allocation was made. But steel is bought by detailed specification. The granting of an authority to acąuire a number of plates, sheets or generał steel against the Ministry of A's allocation was no guarantee that steel of the particular specification, sizes and shapes would, in fact, have been produced in sufficient ąuantity.1 Eąually, within any one of the groups allocated, more of a particular specification of steel might have been produced than users armed with authorities to purchase reąuired. If the shortage continued, steel of that specification usually became the object of a special sub-allocation by direction of the materials committee limiting the amounts of this sort of steel for which departments were empowered to issue authorities. A surplus in the opposite case was more easily met by a lifting of the control. Large firms were first empowered to issue sub-authorisations which permitted sub-contractors to obtain steel. Sub-contractors passed on the authority to those to whom they, in turn, had put out business and so on. Very smali users, those consuming less than one ton a month, needed no authority at all. Many smali firms, not able to ąualify for the issue of an authority direct from a department, might be taking work from several firms in industries sponsored by different departments and collecting their steel in smali lots on sub-authorisations issued finally by as many Ministries. At one time, the proliferation of sub-authorities and sub-sub-authorities was consider-able. No one, except the purchaser, knew exactly how much steel a firm working on sub-contracts might finally have been authorised to acąuire and there was always the possibility of abuse. A special scheme was introduced to handle the reąuirements of "smali" consumers. Firms with a ąuarterly consumption of less than twenty-five tons were asked to apply direct to the Regional Office of the Ministry of Supply. That department received a special allocation for this purpose. It was their responsibility to issue the authorisations to smali consumers and to enąuire from the depart­ment or departments sponsoring the industries in which the proposed products were grouped, whether the application was proper and should be satisfied. 1 Seventh Report from Select Committee on Estimates: Session 1950/51 (Sub-Committee F), The Timber Control, p. xx.