Ceisteanna—Questions. Oral Answers. - Iron and Steel Scrap Prices.


andMr. Donnellan asked the Minister for Industry and Commerce if he is aware of the excessive discrepancy in prices paid by Irish Steel Holdings, Ltd. to persons engaged in the business of iron and steel scrap; and that such discrepancy has created a virtual monopoly in this trade; and if he will take steps to have this matter rectified.


asked the Minister for Industry and Commerce if he is aware that a virtual monopoly exists in the supply of iron and steel scrap to Irish Steel Holdings, by reason of the excessive differential in the prices paid per ton depending on quantity; and if he will make a statement on the matter.


asked the Minister for Industry and Commerce if his attention has been drawn to the virtual monopoly in supplying scrap steel and iron to Irish Steel Holdings Ltd.; and what action it is proposed to take to deal with the situation.


asked the Minister for Industry and Commerce whether he has recently received a circular concerning the prices paid by Irish Steel Holdings Limited for iron and steel scrap, alleging that the price structure discriminates against the small supplier; and whether he intends to take any action on the matter of this alleged discrimination.

I propose, with your permission, a Cheann Comhairle, to take Questions Nos. 73 to 76 together.

I am aware of the prices paid by Irish Steel Holdings Ltd. for iron and steel scrap, and I have also seen the circular letter which has been sent to Deputies about this matter by an interested party, who was informed by me about a year ago that any evidence of unfair trading in iron and steel scrap should be brought to the attention of the Fair Trade Commission for investigation. I am informed, however, that there has been no approach to the commission on this matter.

May I ask the Minister first if he thinks it is a satisfactory situation that the affairs of one State company should, in fact, be referred to another State organisation? Does the possibility not arise under the 1953 Restrictive Trade Practices Act, section 16, that since it could be argued that the work of Irish Steel Holdings was performed under a statutory duty, it was not in any sense the function of the Fair Trade Commission to investigate?

In answer to the second part of the Deputy's supplementary question, the answer is "No". The answer to the first part is that I see no reason why any company, whether a State company or private enterprise company which is engaged in commercial activity, should not be subject to the law laid down by this House in relation to unfair trading. I am speaking of the general principle; I am not implying for a moment that there is unfair trading involved in this case. On the general principle, it seems to me that all companies, whether State or private enterprise engaged in commercial activities, should be subject to the procedures laid down by this House in relation to unfair trading practices.

I should like to know what specific action the Minister proposes to take about a situation where a man selling scrap to the extent of 1,800 tons per annum gets £8 11s 6d per ton while the man selling up to 500 tons of scrap gets £3 16s 6d and the largest dealer in scrap, over the 1,800 tons, happens to be a director of the organisation at the private end. This is a very serious situation and I am surprised the Minister is not more concerned about it.

Again, if I may take the latter part of the question first, the director of Irish Steel Holdings to whom the Deputy refers was appointed by me some years ago——

I did not know that.

——and at that time the arrangement to which the Deputy refers existed. I should like to make it perfectly clear that this arrangement in regard to the purchase of scrap was not introduced after this man was appointed as a director but had been in operation for quite a number of years before that and there is no connection between the two. As regards the first part of the question, I should say that the basis of the questions which I am answering is a circular letter sent to Deputies by certain interested parties. As I have pointed out, these complaints were made by the parties to me about a year ago and I suggested that if they felt there was ground for complaint they should refer the matter to the Fair Trade Commission. They did not do that. I should also tell the House that there is an association of scrap dealers from whom I have received no complaints.

Would the Minister not consider that he is involved in this because this is a State-aided company and that he could make a direct intervention?

I am aware of the reasons for this policy but in case there should be any reference to the Fair Trade Commission I do not wish to prejudge the position. Being aware of the reasons for the policy it appears to me on the face of it that it is not an unreasonable way for Irish Steel Holdings to operate.

Could the Minister explain to the House why one man gets £4 15s per ton less for scrap than the big man in the business? It does not seem to make sense.

It is a rather complicated matter to explain. I am in some difficulty about this because I do not want to appear to be taking up a firm position in case it should be referred to the Fair Trade Commission.

Could the Minister deal with it when he is replying to the Industrial Development Bill?

I am afraid it would not be relevant.

It would be as relevant as some of the matters mentioned by the Minister in his introductory speech.

That is not true. On the face of it this appears to be reasonable but I am not making a final judgment on it.

Will the Minister say if it is true that scrap can only be exported if Irish Steel Holdings do not require it? Will he further say if there is only one firm which are in a position to export this scrap, which have a complete monopoly and the price they receive is £12 per ton and they pay £4 15s Od a ton for it?

It is true that scrap can only be exported if it is not required by Irish Steel Holdings. The arrangements in regard to the collection of scrap have the effect that it is bought from one firm only which acts as collecting agent which provides a service for Irish Steel Holdings in sorting and grading it, a service which Irish Steel Holdings would have to provide otherwise at their own expense.

It sounds very much like the monkey and the piece of cheese.

Does the Minister know of any other European country where the price for scrap is as low as the price paid to the small merchant here?

I do not know offhand but I would remind the House that what is involved is the provision of scrap for Irish Steel Holdings which is the only steel company we have. If we were to accept the position that scrap should be exported wherever the market was best and only given to Irish Steel Holdings if their price was higher than that abroad, we just would not have Irish Steel Holdings.


When we become members of the EEC will this provision lapse, because it is contrary to the Rome Treaty and Irish Steel must disappear? That is a most disturbing statement for the Minister to make.

I have not said that. Deputy FitzGerald is surely at least as well aware as I am of the difficulties that have arisen in the EEC in regard to the steel business and in fact a number of the theoretical arrangements that were made do not apply because of those difficulties. Furthermore, the future position of Irish Steel Holdings will not necessarily be as it is at the moment. There may be changes in the structure of Irish Steel Holdings in the future, in its methods of operating and in the kind of business it engages in.

Is it only after eight years that the firm are thinking of adaptation?

The Deputy is being very unfair to Irish Steel Holdings. If he looks at their accounts he will see that not alone have they been engaged in adaptation but they have been very successful in improving their profitability record very considerably. They have increased their productivity. They are not completely reliant on scrap here and they import billets and so on from abroad. What I am referring to is that in the light of possible changes, because of entry into the EEC, a lot of thought has been given to the future of the company and certain matters are under consideration about which I am not free to talk. I would remind the House that if we did not have Irish Steel Holdings this country would be a lot less well off and about 800 men, who have good employment there at present, would be without work. This must be borne in mind in any discussion on the whole situation of Irish Steel Holdings.