HC Deb 28 May 1968 vol 765 cc1515-7
28. Mr. Michael Shaw

asked the Minister of Power if he will give a direction to the British Steel Corporation to sell off those of its activities and actions not directly concerned with the melting and production of bulk steels with a view to providing capital for additional manufacturing projects.

Mr. Freeson

No Sir.

Mr. Shaw

Does the Minister recollect that his right hon. Friend informed me a month ago that it is likely that the Corporation's borrowing powers are to be increased before the Summer Recess? Since then there has been a further savage credit squeeze on private industry. Is not it right that the same restrictions should apply to the State corporations as to private enterprise? Would not this be a very relevant way in which the B.S.C. could make a contribution to financing itself rather than relying on further publicly-raised capital?

Mr. Freeson

A very close examination has been made of the borrowing requirements of the industry. On the hon. Gentleman's second point, which relates to the Question, one must not assume from what I said in reply to that Question that the Corporation will necessarily want to retain all that it has now, but it will have to await the outcome of its general review of its holdings before it can establish those parts which are to be retained and those which are to be closed down, reshaped and so on.

Mr. Mendelson

Is my hon. Friend aware that those who gain their livelihood through the steel industry and are working under the Corporation would resent any propaganda by way of cheap contributions at a time when the industry is building itself up very successfully and the level of production has increased from 74 per cent. to 84 per cent. of capacity?

Mr. Freeson

I accept both the content of those remarks and the spirit in which my hon. Friend made them. My references were solely to certain kinds of diversification activities which it will be for the B.S.C. to make a study of and to take decisions on in due course.

Mr. Patrick Jenkin

Reverting to the hon. Gentleman's answer to my hon. Friend's supplementary question, may I ask whether he recognises that it is indeed encouraging? Will he expedite the study by the Corporation to make sure that it no longer hangs on to the somewhat mixed rag-bag of assets outside the steel industry which it took over on nationalisation?

Mr. Freeson

That is a job for the B.S.C, and I am confident that it will undertake it as expeditiously as it can.

31. Mr. Tinn

asked the Minister of Power what steps he is taking to ease the capital burden of the British Steel Corporation.

Mr. Gunter

None, Sir, at present.

Mr. Tinn

Is my right hon. Friend aware that it is widely agreed that the steel industry was taken over at grossly inflated compensation and that it is entirely wrong that yet another nationalised industry and the workers in it should have to bear a totally disproportionate and unnecessary burden?

Mr. Gunter

These matters are under review, and it is too early yet to have the views of the British Steel Corporation on the matter my hon. Friend is talking about.

Mr. Michael Foot

Does my right hon. Friend agree that despite the economies achieved for the Exchequer and the taxpayer by the representations of my hon. Friend the Member for Poplar (Mr. Mikardo) and others, who achieved some reduction in the compensation, it is still the case that the compensation is extremely high? Does not he think that it would be advisable, in the interests of the industry, that the matter should be reconsidered now rather than imposing a burden on the industry for years to come?

Mr. Gunter

I am not sure that I agree with my hon. Friend that it is time for reconsideration now. The terms of compensation were fixed. I can only repeat that these and kindred matters are now under review by the Corporation.

Mr. Patrick Jenkin

If the compensation is as high as the hon. Member for Ebbw Vale (Mr. Michael Foot) suggests, is not that a reflection of the fact that some of the steelworks, such as those at Consett and Ebbw Vale, should be closed down as part of any process of rationalisation?

Mr. Gunter

That argument does not follow at all. It is not true. The steel trade is internationally weak at present and provides an insufficient basis for a judgment on the amount of compensation to be paid.