British Steel Corporation

HC Deb 10 December 1968 vol 775 cc195-7

16. Mr. Biffen

asked the Minister of Power what is the expected capital expenditure by the British Steel Corporation for the current year; and how this compares with the corresponding figures for last year.

Mr. Mason

As I said in my reply on 15th July, 1968 [Vol. 768, c. 181] the programme which I had approved provided for capital expenditure this year up to £100 million. At this stage I cannot predict the exact outturn. The British Steel Corporation's capital expenditure in the eight months from vesting date to March, 1968, was £54 million.

Mr. Biffen

Will the right hon. Gentleman say if this somewhat low figure has been influenced by the low level of retained earnings of the British Steel Corporation and if in his view this points to the commercial realism of allowing the Steel Corporation to increase its prices?

Mr. Mason

No, I was referring to the £54 million which was for eight months of 1968. This represented an annual rate of about £81 million, and it is with that in mind that the approval of up to £100 million in 1968–69 should be compared.

Mr. Hooley

Will my right hon. Friend say when further information is likely to be given on the longer-term capital programme for the steel industry?

Mr. Mason

Yes, my hon. Friend should await the answer to the next Question.

17. Mr. Biffen

asked the Minister of Power if he will publish the estimated capital requirements of the British Steel Corporation for the period 1969 to 1975 and indicate the extent to which such capital will increase new capacity and modernise existing capacity, respectively.

Mr. Mason

The Corporation has not yet submitted to me a capital development programme covering this period. The nature of its expenditure will be determined in the light of its plans for long-term development, work on which is still in progress.

Mr. Biffen

Will the right hon. Gentleman give an undertaking to the House that he will encourage and sustain the British Steel Corporation, that in their policy of siting new investment they will be governed by economic considerations and not by politically motivated regional lobbying?

Mr. Mason

Cmnd. 3437, A Review of Economic and Financial Objectives of the Nationalised Industries governs that, and the British Steel Corporation is well aware of it.

Mr. Ogden

Will my right hon. Friend compare the advice which he has received this afternoon from the hon. Member for Oswestry (Mr. Biffen) with previous advice from hon. Gentlemen opposite and will he say which advice he is most likely to follow?

Mr. Mason

I have already said to the hon. Gentleman the Member for Oswestry that Cmnd. Paper 3437 on financial objectives governs the operation of the British Steel Corporation.

18. Mr. Edward M. Taylor

asked the Minister of Power how many persons are employed in the headquarters of the British Steel Corporation in London.

Mr. Freeson

This is a matter for the Corporation but I am advised by the B.S.C. that it has reduced headquarters staff by about 350.

Mr. Taylor

Is it not madness for a Government that advertises on the London Underground that firms should move outside London, to concentrate so much decision making there? Will it not be the final insult to Scotland if this should impose a higher price for steel in Scotland for the first time since the war?

Mr. Freeson

I do not think the hon. Gentleman listened to the Answer. He should congratulate the British Steel Corporation on reducing staff since the industry was vested in it last July. He asked a specific question about the number employed. The number now is, I think, 1,370, which is a reduction of 350 during the months since the B.S.C. took over.

Mrs. Ewing

Is the Minister aware that there is a fear of over-centralisation in the steel industry with the gravitation away from Scotland? Can he give an assurance that the Scottish division will retain autonomy and the right to make its own decisions on matters affecting it?

Mr. Freeson

If I may say so, that question is not particularly helpful to the future steel industry. The Question to which I replied was about the number employed at headquarters in London, not whether there was to be a reduction of the steel industry in Scotland of which there is no intention by the industry.

Mr. Patrick Jenkin

With respect to the hon. Gentleman, the hon. Member for Hamilton (Mrs. Ewing) was asking about ths centralisation of decision-making in the steel industry. Is not this question extremely relevant, and is there not grave concern at the proposals put forward by the British Steel Corporation for centralising affairs in London?

Mr. Freeson

I am unaware of any grave concern, except perhaps among irresponsible hon. Members opposite.

Mr. James Hamilton

Is my hon. Friend aware that those of us who served on the Committee are fully aware of the circumstances and that we in Scotland recognise that we have to have central Government? On that basis, is he prepared to tell the House that, if any future expansion of the steel industry is to take place, it will be in Scotland?

Mr. Freeson

There is bound to be rationalisation and expansion in various sectors of the industry. We are awaiting the proposals which the Corporation will make to the Government on the matter. But my hon. Friend will be aware of the proposals from within the industry for major expansions in certain parts of Scotland which were announced in the Press recently.