HC Deb 13 February 1964 vol 689 cc537-40
12. Mr. O'Malley

asked the Minister of Power what information he has regarding the relative rate of increase in productivity of the iron and steel industry in the United Kingdom compared with the European Coal and Steel Community.

Mr. Erroll

I am advised that the output of crude steel per man-hour increased at an average rate of 2.8 per cent. a year in the United Kingdom and of 4.2 per cent. a year in the European Coal and Steel Community between 1957 and the second quarter of 1963. Productivity in the United Kingdom in the fourth quarter of 1963 was much higher than the average for the year as a whole and output per man-hour in that quarter was 28.5 per cent. higher than in 1957, equivalent to a rate of growth of about 4.3 per cent. a year; the corresponding figure for the Community is not available.

Mr. O'Malley

Is not it a fact that the progress of the United Kingdom steel industry over the last decade in terms of production and productivity has lagged badly behind all the members of E.C.S.C.? Would not the Minister agree that the reason is the restrictive general and economic policies of the Government, the inadequacy of the steel firms in respect of research and technical innovations, and the low number of qualified scientists and engineers employed?

Mr. Erroll

I rather expected that the hon. Gentleman would draw the wrong deduction from the figures which I have given. The fact is that productivity expressed as a percentage is very much dependent on the degree of utilisation of capacity in the industry at any given time. A decline in demand appears to lower the rate of productivity, because men are not discharged as they might be in other industries. When there is an increase in demand, a considerably higher output is achieved by the same number of men, and so it is thoroughly misleading to make the sort of comparison which the hon. Gentleman has made.

Mr. O'Malley

But is not it a fact that other steel industries in E.C.S.C. have been working to a greater degree and capacity in recent years than the United Kingdom steel industry, and that one of the reasons for the low growth of productivity in this country is because we have been working at under capacity as a result of Government policies?

Mr. Erroll

I have often heard it put by hon. Members opposite that there should always be a good reserve margin of capacity in the iron and steel industry of this country and, because of its existence, we have been able to improve output when more steel is required.

Mr. Stratton Mills

Is my right hon. Friend aware that if the industry were free from the threat of nationalisation it would be a good thing?

Mr. Erroll

I am glad to endorse what my hon. Friend has said.

23. Mr. J. Robertson

asked the Minister of Power (1) what is the estimated capacity of strip steel production in Scotland; and what is the extent of the current demand for this commodity in Scotland;

32. Mr. Lawson

asked the Minister of Power what plans he has for the future of the strip and sheet steel industry in Scotland, as a contribution to development and growth in the areas to which special reference is made in the White Paper on Central Scotland.

Mr. Erroll

Capacity for strip mill products is about 675,000 tons a year. Current demand for sheet in Scotland is between 175,000 and 200,000 tons. There is also some demand for light plate. Existing facilities are capable of considerable expansion, but no new capacity is planned at the moment.

Mr. Robertson

Would not the right hon. Gentleman agree that this is a most unsatisfactory position, and would he have a word with his right hon. Friend to see if it is possible to have another car factory transferred to Scotland, or some other industry which would use strip steel?

Mr. Erroll

There is no satisfying some hon. Members opposite. They complained bitterly when there was no strip mill in Scotland, and now that one of an economically efficient size has been installed they are complaining that it is there but it is not fully utilised. If it were fully utilised we could not attract to Scotland more industrial capacity to use the products of this mill. We have always said that it would take time for the consumption of this strip mill to be built up in Scotland. In the meantime, it is open to Colvilles to send their strip to England or to compete in overseas markets.

Mr. Lawson

Is the right hon. Gentleman aware that so long as he continues to rely, as he and his right hon. Friend have relied, upon private enterprise dealing with this difficulty, we shall continue to have this problem? Is he not aware that the strip mill was put there through Government intervention and that it has become necessary to take much more radical steps than are dreamed of at present in order that this strip mill can be fully utilised? This strip mill can be the making of Scotland industrially in the modern age, and will he not see that it is utilised?

Mr. Erroll

I am glad to hear that the hon. Gentleman welcomes the establishment of this strip mill in Scotland, and that we have taken the right decision. As to the establishing of firms in Scotland to use this strip, this is a matter of industrial location, which is the responsibility of my right hon. Friend the Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade.

24. Mr. J. Robertson

asked the Minister of Power at what level of its estimated productive capacity the steel industry of Scotland has been operating in the past year.

Mr. Erroll

About 65 per cent. of capacity. In the final quarter the rate was about 76 per cent.

Mr. Robertson

Is the right hon. Gentleman aware that this is quite the worst performance in the whole of the United Kingdom? Would he see whether this situation arises through lack of shipbuilding orders on the Clyde, and, if so, will he again approach his rgiht hon. Friend to see if something can be done to steer shipping orders to the Clyde so that the steel works can come nearer to using its capacity?

Mr. Erroll

A number of important steps have been taken during the last year to assist in the growth of Scottish industry, particularly that part using steel. I am very glad to see that these measures have been so effective that in the past quarter the rate of use was up to 76 per cent. capacity.

Mr. Gresham Cooke

Is my right hon. Friend aware that two English motor car companies have established factories in Scotland and that there is a considerable demand from these companies for ancillaries, which now have to be brought all the way from the Midlands, and that if Scotsmen would show more enterprise in setting up more factories, they could use their own steel production?