HC Deb 24 May 1971 vol 818 cc50-168
Mr. Speaker

Before I call the hon. Member for Ebbw Vale (Mr. Michael Foot) to move his Motion, I wish to inform the House that I have selected the Amendment in the name of the Prime Minister and his right hon. Friends.

4.25 p.m.

Mr. Michael Foot (Ebbw Vale)

I beg to move, That this House deplores the persistent uncertainty in the steel industry created by the pronouncements and policies of the present Government, and calls upon the Government to give steady backing to the British Steel Corporation in carrying through the greatly-enlarged investment programme in the industry which the national interest requires. Perhaps I could satisfy my hon. Friend the Member for Ealing, North (Mr. Molloy) by reminding him that I speak in this House not as a Privy Councillor. Therefore, I hope that I will be able to represent some of the views he might wish to have put on some of these questions.

In moving this Motion, perhaps I may be permitted to suggest that there is a connection between the matter of supreme importance which the House has been discussing only a few moments ago and this debate which we are initiating on the steel industry. In seeking to illustrate the connection between the matter of Britain's entry into the Common Market and what might happen to the steel industry, perhaps I could quote a paragraph which appeared in the Sunday Times on 9th May in an article by Mr. Keith Richardson in one of the financial pages of that newspaper. In that article he discussed the connection, or alleged connection, between these two matters and the question, which has been mooted in certain quarters, that the Government might be eager to secure some foreign capital to be invested in the steel industry. What Mr. Richardson said at the end was this: The possibility of foreign cash being used to buy off parts of the British Steel Corporation seems now more remote, however. One British group has approached German steelmakers for financial support only to be told 'We see no point in investing in British steel, for once you are in the Common Market we shall put your steel industry out of business anyway'. I do not subscribe to that doctrine. I do not believe that anybody, not even the present Government, wishes to put our steel industry out of business. I do not believe it can be put out of business. However, I believe that, whether or not we go into the Common Market, it is of the utmost importance that we should do everything in our power to strengthen the British steel industry certainly. If, by any misfortune, we eventually go into the E.E.C., we will need a powerful steel industry to sustain our place in the Community, and, if we stay out, a strong steel industry will also be very necessary. Therefore, one of the reasons that we are eager to have this debate is in order to examine what has happened to the steel industry over the past year and to discover what proposals the Government are now to bring forward.

The Government may well say that they would have preferred to have had this debate at a slightly later date when they could have come forward with the proposals which arose from the investigations which were announced by the Government in the debate on the steel industry on 18th March. But the settlement of the timing of this debate conforms exactly with the time available as laid down by the Secretary of State for Trade and Industry and his hon. Friends in that debate. They then said that they were undertaking an extremely urgent investigation into the steel industry and that they hoped they would be able to make their report to the House about this matter within six weeks or two months. The two months are now up.

The Minister for Industry said in that debate that he hoped that it might be possible that the period would be shorter, and I am sure that he must recognise that every day that passes prolongs the uncertainty in the industry. There are the most powerful reasons for the Government to announce their policy as speedily as possible. Therefore, even though the Government have told us that they are not yet ready to make this statement, we thought it right to go ahead with this debate so that the Government should once again have the opinions of those who represent the steel constituencies when they go forward with their plans.

Although of course we regret the delay, we would like to have the right decisions after Whitsun than the wrong decisions before Whitsun. Therefore, if after Whit sun the Minister comes along with comprehensive proposals for removing the uncertainty which the Government have created in the steel industry, and if he outlines the long term proposals as a penitent sinner but as one who wishes to reform, there will be rejoicing on these benches and also, I gather, in celestial quarters as well. Therefore, we look forward to the statement to be made by the Minister, and it is in that spirit that we initiate this debate.

I am sure that the Minister will hardly wish to quarrel with the first part of our Motion, which deals with the present feeling of uncertainty in the steel industry. Anybody who has any knowledge of the steel industry knows that during the past weeks and months there has been serious uncertainty about Government policy and about what is to happen to the industry. Indeed, The Times Business Section in an article a few days ago described this uncertainty as "intolerable". The article went on to say that it hoped the Government in bringing forward their short term proposals would also bring forward their long term proposals. I will say a little more about that matter later.

Mr. Campbell Adamson of the C.B.I., who knows something about the steel industry, has also stressed the unhealthy nature of the uncertainty surrounding the industry at present. I am sure that the right hon. Gentleman the Secretary of State for Trade and Industry would not dissent from the proposition that he should end the uncertainty as swiftly as possible. If he cannot do so today, I hope he will recognise that we shall expect him to make his announcement immediately after Whitsun and that the Government will ensure that we shall have a further debate at that time.

What are the Government's reasons for intervening in the way that they have? I shall refer to the matter briefly, but it is necessary, because these are the grounds which the Government have put forward for intervening in the industry. They say that their action was necessary because of the mistakes or grievous errors in the British Steel Corporation's forecasting. The right hon. Gentleman has quoted the figures on a number of occasions, as indeed have other Government spokesmen. Their charge has been that the British Steel Corporation was £150 million out in its forecasting.

The way that the right hon. Gentleman quoted those figures was most unfair. The new structure of the steel industry had been in operation for a short period only when this Government came into office. In July, 1970, the Steel Corporation prophesied a profit of £33 million for the year 1970–71. In fact, I understand that there will be a loss of about £14 million. We have to take into account also the increased revenue which the Corporation had from increased prices during the period of, I gather, £21 million.

If all those figures are gathered together, it means that the mistake in the forecast, if it can be put that way, amounted to £68 million on a turnover of £1,400 million. Of course it is a mistake. If the right hon. Gentleman examined the accounts of many other companies during the past year, I am sure that he would find that mistakes in forecasting had been about the same or worse. But the right hon. Gentleman has taken a figure of £100 million which had been mentioned previously by the Steel Corporation, which was certainly not an official figure and was hedged around with all manner of qualifications, and presented a picture or an accusation to the House and to the country that the British Steel Corporation have been most mistaken in its forecasting.

The whole premise on which the right hon. Gentleman acted was unfair to the Steel Corporation and gave an unfair picture of the real state of its finances. I mention that partly because the Secretary of State has used the argument so frequently and because the Government, on the basis of those figures, have taken the most extraordinary action.

Because of its difficulties, its financial situation, the general inflationary situation and difficulties with cash flow, the Steel Corporation had to go to the National Loans Fund to get extra cash in the latter part of last year. That is not an extraordinary occurrence. Indeed, the Corporation has a fairly good record in this respect. However, that is no reason for the Government taking measure after measure to put the screw upon the industry. As I say, they took extraordinary action against this great nationalised industry.

Since January of this year the Government have insisted that major investment plans should be submitted, and resubmitted in certain cases, for investigation before the Corporation was given the right to go ahead. Since the debate on 18th March a joint steering group has been established which has conducted further surveillance over the industry, so that for the whole of the intervening two months nobody could know for certain where responsibility lay in the conduct of the operations of the Steel Corporation. It is partly on that account that we have had such confused answers from different Members of the Government about the various investment schemes throughout the country which are of such importance to the steel industry and to my hon. Friends who represent steel constituencies.

The right hon. Gentleman understands the situation perfectly well and he stated it fairly in the debate on 18th March when he initiated this joint steering group. He knew what was happening. He knew that the Government would hold up various investment schemes until they had examined them. We were not told how the process of examination would take place. The right hon. Gentleman understood that, but the Prime Minister and other Members of the Government did not, because when we put questions about the hold-up of particular investment schemes—for example, the investment scheme at Ravenscraig—we got contradictory answers.

We need not have much dispute on this matter. When some of my hon. Friends and I went to see the right hon. Gentleman recently to discuss the matter, he received us, as is natural, most courteously and discussed it with us. I asked—I am sure that he will not mind confirming it in the House—whether he would give a clear confirmation that, when he gave the interim report of the joint steering group to the House of Commons on its findings about the future of the industry, he would give an undertaking that absolute authority would be restored to the British Steel Corporation according to the Act of Parliament laying down its rights and responsibilities. The right hon. Gentleman said "Yes" to the proposition that when the interim report was made—we had hoped to have it now, but I presume that it will be made immediately after Whitsun—full authority would be restored to the Corporation to go ahead with its jobs and thus remove the uncertainty which has surrounded these various investment programmes. He told me that that was going to happen, and that was confirmation of the interference which the joint steering group has been conducting during this period.

The Government held up all the major investment programmes of the Steel Corporation, but they have now released one or two. The Secretary of State for Wales announced the release of the Llanwern project, which had been agreed by the previous Government and by this Government, but which was held up by them. They have now revoked that hold-up.

We were told that Ravenscraig was held up under the same kind of arrangement, but the Government have not yet made any statement about their decision, so confusion remains. I have no doubt that my hon. Friends representing different steel constituencies will go through the list today and put questions to the right hon. Gentleman. I hope that he will have clear indications for my hon. Friends about the position.

Prior to the establishment of the junior steering group, or prior to the establishment of the surveillance which the Government made over the investment programmes of the industry at the beginning of the year, under the arrangements which had already been announced by the Steel Corporation, and confirmed by the Minister for Industry when he visited the area, Ebbw Vale was to have a new pickle line and the plans for going ahead were ready. When we get the single word, "Yes", the plans can be put into operation immediately. That is another project which is held up by the process which the Government have established for surveying all the different investment projects of the Corporation. Even a new precipitator for our open hearth furnace, which is essential for ensuring that we conform to the rules and regulations laid down by the inspectors who deal with these matters, is held up by the Government's restriction on the various invest- ment programmes which should be going forward.

I ask the right hon. Gentleman to answer the following specific questions. First, will he reassure us that when he makes the interim announcement absolute full authority over all investment programmes will be restored to the Steel Corporation? Secondly, will he answer the question which I put to him in the debate on 18th March by telling us how much money has been wasted by the holding up of these programmes during these two months—the period will be over two months by the time he makes the announcement—because many of these programmes have already increased in quite heavy cost in the interim period?

The pickle line in Ebbw Vale will make a profit, and the quicker that we can get on with it the better for all concerned—better for the finances of the Corporation, better for our prospects in Ebbw Vale, and better for the nation as a whole. I hope, therefore, that the Government will give us an estimate of the extra cost that has been added to the burden which the Corporation has had to bear because of the Government's intervention.

The joint steering group which has been in charge of the steel industry over the last few months is a kind of constitutional monstrosity. It is a most curious arrangement that governing the investment programmes and influencing the pricing policy and recommendations about hiving-off of this great industry there should be a body on which sits representatives from the Treasury, from the right hon. Gentleman's Department, and from the British Steel Corporation, including Lord Melchett, the Chairman, himself. I think that if such a body had to be established the right hon. Gentleman himself should have presided over it. To have civil servants in charge of such a body is a most curious way to proceed, particularly when they are able to shuffle off responsibility from one to the other.

I am not claiming that the relationship between Parliament and the nationalised industries is perfect—I think that we have a great deal to learn about it—but every report that has been presented to this House in recent years, and in particular reports from the Select Committee presided over by my hon. Friend the Member for Poplar (Mr. Mikardo), has emphasised how important it is to draw the lines absolutely clearly between the responsibilities of the Government and those of the Corporation. That is the only fair way to proceed. If those responsibilities are muddled up and the decisionmaking body is partly Civil Service, partly Treasury, and partly the Corporation itself, nobody knows whose is the responsibility for different matters.

It may be that one reason why that has been done is that the joint steering group has discussed, in some measure, the hiving off proposals. I am not sure whether that is the case. The Minister shakes his head, and I am glad to note that he dissents. Is he confirming that the hiving off proposals are not to be discussed by the committee that is to examine other matters, and that there is to be a quite separate body to examine that issue? That, too, is a curious constitutional arrangement, if there is a joint steering group to govern the whole of the immediate conduct of the Steel Corporation, and another body to discuss the hiving off proposals.

Whether the joint steering group has been discussing the hiving off proposals or not, I think that what the Government have been seeking to do in this respect is to persuade the Corporation to give some sort of support, backing or power, to the hiving off proposals which they wish to bring forward, because they need some support. The Government realise that they would have the greatest difficulty in getting any hiving off proposals through on their own recommendations, because everybody knows how prejudiced they are in their actions. They therefore want some support from the Corporation itself so that they can put the proposals forward and say that they must not be too strongly opposed by hon. Gentlemen opposite because they have the approval of the Corporation.

I hope that the Minister will not proceed in that way. I hope that he will take responsibility for any proposals for hiving off that are put forward. I hope that he will not try to implicate the Corporation in those proposals, because he knows as well as I do—and he can confirm it today if he likes—that the Corporation has, from the beginning, been opposed to all the proposals which have been made by some hon. Gentlemen opposite for splitting up the Corporation. The Corporation has been opposed to the proposals for taking away whole sections of the industry, such as special steels, constructional engineering, chemicals or tubes. It has opposed all those proposals, and I hope that the Government will not try to conceal that fact.

What the Corporation has said—and there is no secret about this, because this is what it proposed to the Labour Government during their last few weeks of office—is that there should be a little hiving off in certain areas, and a little hiving on. That is a different process from the one which has been recommended from some other quarters. I hope, therefore, that the Minister will make it clear that there will be a statement in the very near future, which will carry forward the statement that he made in April, to the effect that bulk steel-making is not to be split, and that he has abandoned a large part of the hiving off or splitting up process which he had previously proposed. I hope that the Minister will undertake to make a statement on that subject, as well as on the financial questions which have been discussed by the joint steering group.

I do not want to embarrass the right hon. Gentleman. It may be that in this respect he has been fighting a good fight. He may have been somewhat late in coming to his conclusion, but I think that he has difficulties with which he has to contend—the Prime Minister, and some of the people in his Department—and some people say that we must regard the right hon. Gentleman as a good man who fell among Powellites. It may be that that is the position that he occupies in the Conservative Administration, but I hope that he will give a clear undertaking that the hiving off programme has been abandoned. I believe that that is how the Government's mind is moving, and I should like to assist the right hon. Gentleman in carrying through these proposals. I should like to assist him by what is known as the Kutuzov strategy of offering a golden bridge by which he can escape from the territory which he should never have tried to occupy.

We remember the Napoleonic flourishes of the right hon. Gentleman at his conference last autumn. We remember him talking about disengagement, hiving off, splitting up and selling off, but the more he considered the question the more he realised that it was a hopeless cause and so he made his announcement of two or three weeks ago. We hope that very soon he will clear up the whole question, and thus avoid wasting time, energy and money on this whole business of hiving off.

To assist the right hon. Gentleman further, I ask him for an assurance, which I am sure he will wish to give me, about the steel industry. When we discussed the Coal Bill in Committee and in the House, we secured from the Government an undertaking that if any proposal was made for hiving off a part of the coal industry the matter would come before the House, and we would be able to debate it. That provision is written into the Bill which the right hon. Gentleman approved. I suggest, therefore, that he should give that kind of undertaking in respect of the steel industry. I do not want to celebrate a triumph too soon, but I hope that we shall be allowed to forget the whole matter once the right hon. Gentleman says that the sections of the steel industry which were not dealt with in his April announcement will be dealt with in his announcement after Whitsun.

Mr. Frederick Lee (Newton)

My hon. Friend is speaking in the future tense. Does he realise that we are confronted now with the virtual hiving off the wire section of the steel industry, which is highly profitable? Irlam Steel has made profits for the last few months, and we have a problem now, let alone what might happen in the future.

Mr. Foot

I appreciate what my right hon. Friend says and the feelings of his constituents from Irlam, many of whom I believe are in the precincts of this House today making their representations. As my right hon. Friend will recall, when we had a meeting with Lord Melchett, the Chairman of the Steel Corporation, he made it clear that that was not a closed subject but was one on which representations could still be made. I am sure that my right hon. Friend would agree that much the best solution, if it can be secured by some different method, is for the Irlam works to be kept in being, as many of us would wish to see, under the Steel Corporation. That would be the best way to do it, but that is a matter for consultation between the unions, those who work there and the Steel Corporation according to the undertakings given by the Corporation.

Mr. Churchill (Stretford)

As the hon. Gentleman well knows, the Corporation has no interest whatever in continuing its steel-making capacity at the Irlam works, and it has made this clear. In these circumstances, could the hon. Gentleman tell us where Her Majesty's Opposition stand if private enterprise was willing to make a bid which would safeguard the jobs of approximately 4,000 men who live with their families in that area?

Mr. Foot

There have been different statements of the kind of proposition put forward about the Irlam works. As I have said in reply to my right hon. Friend the Member for Newton (Mr. Frederick Lee), the proper way for this matter to be dealt with, immediately, is by further consultations between those concerned in Irlam, the unions and the British Steel Corporation.

If the hon. Gentleman turns to further questions of what would be the attitude of the Opposition or anyone else to propositions for maintaining the works or for fresh investment in different parts of the industry, I would not think it right for me to pronounce on any individual project without looking at the details. [Interruption.] I will come to the case put by the hon. Gentleman. The right hon. Gentleman in his statement made a proposal about inviting private capital into the industry and said that he would not impose severe or unnecessary restrictions if private capital was to come forward. He welcomed the idea of such private investment in the industry.

It was a very strange announcement to be made by a Government who at that time were holding up a whole series of investment projects in the publicly-owned section of the industry, projects which had been subjected to far more severe scrutiny, as I understand it, than any of the projects put forward about Irlam or anywhere else, for introducing private capital. What the right hon. Gentleman is saying is that he is eager to invite private capital into the industry for investment. By doing that he is going back, not merely on what was decided when the industry was nationalised, but on the general proposition accepted by everyone who knows anything about the steel industry in this country, that there must be some central Government control of some kind, or some central board control over the various investment plans of the industry.

Without such control we will run into the trouble that we have had many times before in the industry whereby investment is begun in one area and then in another and one investment project cuts the other's throat. To some extent that is what happened between Llanwern and Ravenscraig, as many people will understand. Anyone who appreciates what has happened in the steel industry before would be very chary of thinking that the ideal way to solve the problem is to have increased private investment, particularly uncontrolled investment as the right hon. Gentleman was suggesting in his April statement.

It would be a retrograde step which could do great injury to existing projects and which could injure the whole, careful and ambitious investment plan which has been drawn up by the Corporation. When such proposals are made as the right hon. Gentleman has made, I wonder whether they are motivated by the desire to assist the industry or by a desire to injure public ownership.

Let me turn now to the question of prices which has played a big part in all these discussions. In some respects the most arbitrary action taken by the Government in interfering with the affairs of the steel industry was the way in which they interfered with the fixing of the prices. According to newspaper reports, the right hon. Gentleman is again on the side of the angels, if I can put it that way, The Sunday Telegraph of 16th May said: The Prime Minister vetoed a demand in April for a 14 per cent. increase. The Cabinet halved it. Mr. Davies was convinced that the Corporation's case was just but he was overruled. I do not expect the right hon. Gentleman to reveal when he was overruled or how, but that is the general supposition. To do the right hon. Gentleman credit, he did examine the case of the Corporation very carefully. He took some time to do it, but I suppose that was justified and certainly we on this side are in no position to argue that there should be no intervention at any time in the fixing of the prices of the Steel Corporation or other of our major industries. Some of my hon. Friends, when they were in government, intervened to keep down the price of the industry's products. We could not argue that there should never be such intervention and I do not argue that.

I do say, however, that if there is such intervention that has to be taken into account in judging the performance of the industry. It is not fair to say, "We will restrict your price in what we regard as the national interest" and then to pillory the industry for not making a substantial profit. That is what has happened with the steel industry. If it had not been for the prices fixed by the Labour Government, the Steel Corporation would have made a handsome profit throughout the whole period of public ownership, which is more than could be said for some of the parts of the Corporation when they were privately owned.

That is the first argument. It might be that if it had not been for the prices fixed by the Labour Government the Steel Corporation would have made something like £200 million more during those few years, and that would have meant making a considerable profit in that period. The further reason why we believe that this intervention was unjustified is that it was discriminatory. If the Government are taking action to deal with fuel prices, cement prices or oil prices, seeking to restrain prices in those areas, there may be a case for saying that they have a right to do it with the steel industry. There is, however, no case for picking out the steel industry for particularly vindictive and discriminatory treatment, which is what has happened here.

There are no grounds for action which injures the position of those in the steel industry. What does the right hon. Gentleman think will be the effect of this interference with price on negotiations and relationships between the Corporation and its workers? Interference with the price interferes with the whole prospects of the industry. We say that the right hon. Gentleman should certainly look again, and immediately, at this question of the price which the Corporation was demanding. Apparently it was reported that he was in favour of the full increase or at any rate a larger increase than the Government eventually conceded and I hope that he will give us an early statement on that point too.

The price affects not only the wages of steel workers and the profitability of the Steel Corporation and morale in the industry. There is also the question of what was raised by Lord Melchett and others long before this argument on price—that what the steel industry needs in Western Europe is greater freedom in making price decisions, and that if it is to be required to compete and to carry out huge investment programmes, it must have the power to makes these decisions as well. It is grossly unfair first to deny the industry this freedom which is exercised by practically every other industry in the country and then to assault and attack it because it has not achieved great profits.

Let me give a further reason why some of us regard this question of price as of major importance. What worries us about this arbitrary intervention on top of all the other actions which right hon. Gentlemen have taken with the steel industry—the clumsy way in which they have dealt with the investment programmes, the manner in which the joint steering group has operated, the way in which the affairs and energies of the Corporation have been distributed by the hiving off programme and the arbitrary intervention about the price and many other items which we have debated before, such as the abandonment of investment grants—all these matters which injured the profitability and financial position of the Corporation, is the effect that they may have—I do not say "will have" because we want to avert the catastrophe—on general investment programme of the steel industry.

I could quote the statement made by The Director, a paper I do not normally study with great care. In an article on 11th May it confirmed what I said about the way in which the Government had in effect taken over control of the industry, saying that by this action,

… the Government has committed itself to the active management of the British Steel Corporation. The article dealt with the interim report which is expected by the Government as a result of the investment, and concluded: The Government's urgent study of the financial structure of the steel industry must not result in Ministers becoming so preoccupied with today that they forget about five or ten years hence.

Mr. John H. Osborn (Sheffield, Hallam)

Would the hon. Gentleman also comment on the early part of the article, which says that the steel industry … would not be in the mess that it is today had it not been nationalised after a long and bitter political battle."? Would he read the whole of that article?

Mr. Foot

It is not really astonishing that some of the people who produce The Director are opposed to public ownership. They have been for years. The extraordinary fact is that, even though they have been opposed to it, they have now come around to the view that what is required is a long-term plan for the steel industry, which is something that the industry never had under private ownership. One of the reasons that it is in such difficulties today is because the hon. Member and some of his friends starved the industry of proper investment when they were in charge. The record of investment in the steel industry over the previous 10 years was a disgrace to this country and I am amazed that any spokesman of the steel masters should dare to raise his voice in the debate at all.

Mr. J. H. Osborn

I was only drawing to the hon. Gentleman's attention at this stage the content of the article to which he had referred. I will deal with the other matters if I am called later in the debate.

Mr. Foot

The hon. Gentleman was drawing my attention to the false premise; I was drawing attention to the correct conclusion—and it makes quite a big difference.

I say again to hon. Gentlemen opposite who have anything to do with the steel industry—not that there are many—that no one who bore direct responsibility for the low investment programme of the years before 1967 has much right to lecture the Steel Corporation today.

One of the achievements of the Corporation during this period has been to draw up a plan for the development of the industry over the next 10 years, to raise the figures of production—I will not go through the figures; right hon. Gentlemen know them—from £25 million to more than £40 million. This ambitious and intelligent programme will cost a lot of money. There are many people in the steel industry who want to see this plan go through successfully. It is extremely delicate——

Mr. David Lane (Cambridge)

The hon. Gentleman might at least do the House the courtesy of doing his homework before he lets loose a speech like this. He was accusing the former industry of having no long-term plan. Has he overlooked that, in the 15 or 20 years after the war, despite the threats of nationalisation from the party opposite, at least three long-term plans were drawn up and put into operation by, the industry?

Mr. Foot

I understand that, but the three long-term plans were derisory, compared with what was being done in most other countries. The percentage increase in production year by year in the steel industry for the 10 years prior to nationalisation was something like 2 to 2½ per cent. a year—a miserable record. There are people in the Corporation, whose names it would be improper for me to give, who were opposed to public ownership and who are now ready to admit that it is only through the combined, far-seeing, centralised programme that they can draw up a sufficiently bold investment programme.

There are people in my constituency and in the other constituencies represented on this side of the House who wish that programme put forward and pressed through successfully; so even more important than the interim announcement which the Secretary of State was to make is the statement which he will make later on about the whole future of the industry. We should like that announcement brought forward to a much earlier date, because we fear the consequences of continued uncertainty.

What the Steel Corporation is seeking to carry through is not a programme for feather bedding but a programme which will involve a considerable reduction in the total numbers of people who will be employed in the industry over these 10 years. That is a very difficult operation to carry out in a civilised manner, but if it is to be done, the workers in the industry must be assured that, as parts of the industry are run down and as some closures may be made—some closures will have to be made—at the same time the development part of the programme is going ahead at a steady and improving pace.

So every time, when there is an intervention which causes redundancies, without the guarantee that the plan is going ahead, this causes difficulties. I know what happened in my constituency, and it is the same in all the other steel plants of the country which are to be sustained as part of this programme. We must give the workers in the industry an assurance that the industry itself will not be run down—rather, the industry will be raised to a peak which we have not known before. That is what the Steel Corporation has planned for and that is what the Government should back. That is where the Government should be giving their encouragement and support.

The opposite will happen. My fear is that, if the Government continue with all these impositions, restraints, restrictions and interferences in the industry, there could be in the steel industry the same kind of situation as there was in the coal industry, which was run down too fast, in my opinion and those of the National Union of Mineworkers and the National Coal Board. It was a decision taken by the previous Government, which some of us contested. But they ran it down too fast, and now there are problems in building it up again. In the steel industry we can learn from that. We can combine the two processes. At the same time, if we can carry the confidence of the people in the industry, we can carry through the great transformations which have been needed over the last 20 years and the great expansion which we have needed as a great industrial nation. We could carry it through. That is the prospect on one side.

The prospect on the other side is that demoralisation in the industry will go so deep and the interference of the Government will be so continuous that morale will be broken. That would be a catastrophe not merely for the steel constituencies but for the country as a whole.

Therefore, what we fight for in the debate, and what I hope the Government will support, is that we should give the British Steel Corporation one of the great advantages in carrying through this programme—that the leadership of the Corporation commands support and confidence amongst the people who produce the steel up and down the country. If the Government destroy that confidence they will have done the greatest possible injury to an industry on which all other industries depend.

I hope that the right hon. Gentleman and his Government will start approaching the affairs of this industry in a very different mood. I believe that the right hon. Gentleman has learned a great deal about it during the past year. I hope that when he comes forward with his interim statement, if not today, he will be restoring to the British Steel Corporation the power and authority and the financial backing to carry through the great expansion of the industry which the national interest requires.

5.12 p.m.

The Secretary of State for Trade and Industry (Mr. John Davies)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'endorses Her Majesty's Government's decision to undertake thoroughgoing reviews of the financial performance of the British Steel Corporation and of the structure and future development of the British Steel Industry'. Before coming to the real meat of the debate, I deal with three questions, all of which have been raised, in one form or another, by the hon. Member for Ebbw Vale (Mr. Michael Foot). The first relates to the complaints that the first phase of the review now being carried out has not given rise to a statement before this debate or during the course of it. The second matter is the charge that the institution of the review which has been put in hand has led to a serious deferment of investment plans within the industry. The third matter is the imputation which has arisen that there is a deterioration in the relationship between the British Steel Corporation and the Government and that the discussions which have taken place have been in an atmosphere of hostility.

On 18th March, during the debate on the steel industry, I said that I hoped that the first phase of the review would be completed within six weeks to two months. In fact, the results of the study were put before me only last Thursday and that represents a slippage of two days only with regard to the target I set. I should not have thought that that was too bad. The predictions that I made in other debates and at various Question Times are also borne out in exactly the same terms. I cannot accept that this review has been late in coming or that the House has not had the chance of a sight of it which it expected.

I made it perfectly clear that once I had the first phase in hand I should need to devote some considerable time to considering the recommendations put before me. In any case, if account is to be taken of points to be raised in this debate, obviously there has to be a certain amount of time before I can make a statement.

During questions on the Business statement last week, the hon. Member for Motherwell (Mr. Lawson) said that, in discussions with a group of Opposition Members, I had given an undertaking that I would make a statement before Whitsun. This is not correct. I said to him and to other hon. Members that I hoped very much to do so but that I could not give an undertaking. As things have turned out, I am not able to do so and take into account what may go on today.

A word on the subject of deferment of investment plans. This has been a subject which has created a great deal of heat, and I fear that the situation is still not perfectly clear. First, the terms of reference given to the joint steering group were given in mid-March, and they do not in any way relieve Ministers of their responsibilities. The object of the joint steering group is to analyse the problem and to make recommendations. This they are doing, and it is these recommendations which Ministers have to consider.

What I said on 18th March was that I would need to call for a deferment of all starts of new projects from that date until this first phase had been completed. Equally, I said to the Corporation that I wished it to inform me of any new projects which it wished to start before that first phrase has been completed so that I could consider them. I did not conceal for a moment—I accept what the hon. Gentleman said—that that was a limitation on the chairman's normal authority. In other circumstances, he would be entirely entitled to proceed with the investment project in accordance with the programme laid down and agreed with me last autumn to the tune of £185 million. I did so because it seemed that with this major review in hand, it would be wrong to proceed willy nilly with all the projects approaching without further consideration.

Lord Melchett understood the reasons for my request and readily accepted them. Since then—this is the point about which I must give some clarification to the hon. Gentleman——

Mr. John Mendelson (Penistone)

He had no choice. You imposed them.

Mr. Davies

I simply say that he readily accepted them. I hope that the hon. Member will not question the fact that he did. I assure the hon. Member that he did so.

The point which is, perhaps, slightly clouded is that since that time, Lord Melchett has put to me only one new start which, because of the hold-up that I had requested, would not have proceeded—that is with regard to Llanwern. It took us a few weeks to reconsider that and to give the go-ahead. The extent of deferment, such as it is, revolves around that single project. The Ebbw Vale pickle line, for instance, has not been submitted to my investigation.

In a more general sense, it would be quite wrong to imply that the Government's attitude will bring about a fall of investment in the industry. On the contrary, the curve of investment in this industry during the period since nationalisation shows that relatively low figures occur in the early years—£62 million in 1968–69, £81 million in 1969–70, and £140 million in 1970–71. With a programme agreed of £185 million for 1971–72, a large part of which, in any case, is in course of commitment, it can be expected that e investment this year will also be very considerable.

Mr. Eddie Griffiths (Sheffield, Brightside)

Is this £185 million, before price escalation, what the Corporation anticipates spending this year, or is it the cost of projects some part of which will be spent next year? Is this money to be spent during this financial year?

Mr. Davies

Yes, it is the amount anticipated to be spent in this financial year, including, therefore, the continuation expenditure for projects already in course and the institution of new projects.

As regards the question of hostility between the Corporation and the Government, I am very conscious of the frequent allusions to these alleged tensions. I want to refute them. It is obvious that, when one is consulting on these quite difficult issues, there are undoubtedly differences of opinion. How could it be otherwise, and what would be the use of consultation were it otherwise? It would be very misleading to read into them any great sense of hostility between the Corporation and the Government. It simply does not exist.

Moreover, I would refer in the same sense to the question of uncertainty. The hon. Member for Ebbw Vale had much to say about the state of uncertainty which had been created in the industry. Any uncertainty which has resulted from the reappraisal which we have set in course pales into insignificance in relation to the uncertainty which was caused in the industry throughout the whole of the decade of the 1960s and the suspense in which the industry was held as a result of the policies of the Labour Government.

We have had over the last few months a considerable number of debates and discussions on the steel industry. I certainly make no complaint about them. I believe that it is an absolutely key industry in many respects, whether it be in respect of manpower or investment, and particularly, perhaps, in the way it permeates every other part of British industry. It warrants a very special place. It warrants very close attention. It is certainly getting it.

We have in past debates covered very largely the question of the B.S.C.'s financial and operating performance and its manpower policies and decisions in relation to that. I do not propose to go over the ground again.

The hon. Member for Ebbw Vale sought to correct the figures which I gave some time ago on the subject of the apparent deficit—the turn-round in the performance of the finances of the Corporation. I realise that there can be contention as to what figures were given as positive estimates and what were given as generalised indications. What was of fundamental importance was to get a proper forward estimate for this year's out-turn—the out-turn for 1971–72—rather than for the past year to which the hon. Gentleman was referring. Therefore, I would not propose now to go over all that ground again. It relates largely to the past, and what I think we are all concerned about is the future.

I want to say a few words on the reasons, because the hon. Gentleman questioned them, why we decided to carry out a very complete reappraisal of the Corporation's future, both in terms of its development and of its structure. I do not think that there could be any real disagreement that over the post-war years the industry has failed to undertake the level of investment and to rationalise its operations in a manner allowing it to retain its position as a leading steel industry in the world league.

That a major factor in bringing this about has been continual changes in status and great uncertainty cannot be seriously disputed. Although so much of the former Government's 1965 White Paper contained unwelcome views to my right hon. and hon. Friends, who were then in Opposition, we can only concur with its objective, which was to secure a positive development of the industry as a whole, even though we entirely deplore many of the methods which were advised in that White Paper as being the ways to achieve it.

It is interesting to recall the views expressed by the right hon. Member for Barnsley (Mr. Mason) in the debate on the 1969 Act, when he commented as follows: The corporation took over the industry at a low point in its fortunes … already, we can see a distinct improvement … Referring to the introduction of public dividend capital the right hon. Gentleman said this: Looking at the next few years as a whole, there would seem to be ample justification for this further experiment … an experiment I feel confident will succeed."—[OFFICIAL REPORT, 8th May, 1969; Vol. 783, c. 685–6.] Yet as we have taken stock of the situation since last summer we found an industry which had continued to operate in deficit, whose forecasts gave little prospect of doing otherwise without disturbingly high price increases, and whose long-term investment programme to put it back at the top of the world league was enormous and would make vast calls on public funds.

Faced with this paradox of unprofitability on the one side, and vast investment plans, on the other, it was only right that the first line of action should be to carry out a very penetrating reappraisal of the industry's future both in respect of its financial and its investment objectives—long and short-term—and in respect of its structure, to ensure that it was organised in the best way possible to face the future, There was certainly nothing doctrinaire or prejudiced in either of these lines of inquiry: quite the reverse. The whole object was and is, after years—almost decades—of change and dislocation, to set the industry on a new and resolute long-term course determined only on the score of its own best interests.

This penetrating reappraisal is composed of four inter-related but separate studies. The first is that which has just come into my hands—the financial review for 1971–72. The second is that which constitutes the next phase of the economic review and seeks to chart a strategy for the industry for the present decade. The third, which runs in parallal with both, is the structural examination of the industry with a view to defining on a rational basis what broadly should remain in the public sector, what should be in the private sector, what should stand between the two, and how it should be done.

Mr. Michael Foot

When does the Secretary of State expect that the Government will come up with final proposals on the final matter? How long will that cause of uncertainty be allowed to continue?

Mr. Davies

I intend firmly to do so.

Mr. Foot


Mr. Davies

I intend firmly to answer the question. The hon. Gentleman also asked whether this was being carried out by the joint steering group. It is not. It is carried out directly between the Ministers concerned and the Corporation.

The fourth part of the re-appraisal is the reorganisation of the relationship between Government and Corporation aimed at ensuring to the former an ability properly to discharge its responsibility to Parliament and to the public and to the latter the freedom to manage its own affairs within agreed authorities and for the attainment of agreed objectives.

I should like to say something about each of these four parts. As to the short-term review, here we are concerned with achieving the best result we can in this current year—1971–72. We will take all relevant factors into account, including price factors and including not only home price factors but competitive prices abroad. As I have said, I plan to make a statement to the House after the Whit-sun Recess to make known the decisions I have arrived at in the light of that study.

Mr. Michael Foot rose——

Mr. Davies

May I continue and perhaps answer the hon. Gentleman's questions almost as he poses them?

These will cover, first, the expected out-turn of the Corporation's operations in this financial year; second, the investment programme authorised to be undertaken, bearing in mind the previous figure to which I have referred of £185 million; and, third, the extent of funding from public funds as opposed to those generated from within the Corporation.

An indication of the size of the figures involved is to be seen in the White Paper, Cmnd. 4635, where a figure of £289 million as a call on public funds was indicated for one year.

The second part—the longer-term review—is a question, as I have said, of charting a strategy for the industry. The hon. Member for Ebbw Vale said that this had never existed under private ownership. The hon. Gentleman may have forgotten that in 1966 Sir Henry Benson produced a complete forward study of the industry's investment requirements. What is certain is that during the course of the previous Government's tenure there was not such a positive long-term investment programme. This longer-term review will be difficult, ambitious and complex. It will form the framework within which this great industry will evolve in the future, in both its national and international context. It will require a very great effort and—this may prove a disappointment to the hon. Gentleman—I shall be surprised if all those concerned can bring it into my hands any earlier than I have indicated already. I said the autumn. I am confidently hoping to have it before the end of the year. It will be a mammoth task to perform.

It will cover the following matters: the expansion of, and consequent investment by, the Corporation at home, including the principle of a major new green field site; the means by which the Corporation will secure in the long-term adequate supplies of ore and coking coal, with particular concern for the forecast short-fall of world supplies of the latter; the assessment of the desirability of undertaking a greater manufacturing operation at the source of raw material supply, perhaps in Australia, by pelletisation or some such process.

It will take into account the general assessment of the impact of major technological changes which are taking place in the industry. It will consider the scope for international partnerships in manufacture or in raw material procurement or in capital provision. It will concern itself with the critical importance of the industry to the Government's regional policies, bearing in mind that, today, about 50 per cent. of the Corporation's manpower is employed in development areas. It will deal with the manpower consequences of alternative solutions. That those consequences entail a considerable reduction in the ratio of numbers employed to production is known to all. As with the coal and textile industries in the post-war years, to which the hon. Member referred, it is no good concealing that the re-creation of a dynamic and prosperous steel industry in this country will not be attained without rationalisation of the same kind, if not on the same scale.

What is essential is to see the future clear and to be able to plan for it: to ensure that redundancies are anticipated and preparations made for them in good time; to ensure that the imaginative and effective provisions of the Corporation and the Government, in consultation, in forewarning and in shielding those concerned are brought into play at an early date and in an effective way.

That will be the broad area covered by the longer-term review. It will be a major exercise, and it will form the framework within which, I hope, the steel industry will attain again the kind of importance which it has had in the past, to, which the hon. Gentleman referred.

Mr. James Callaghan (Cardiff, South-East)

That list of criteria did not touch on one question: how does the British Steel Corporation determine what the growth rate is to be? Is it advised by the Government? In other words, how does it determine the level of demand it is supposed to aim at over the next ten years, or whatever the period be?

Mr. Davies

The right hon. Gentleman will be aware that, in terms of defining major development, this industry is not subject to very fine tuning arrangements. It moves forward in rather large bounds. This is particularly so at present. Although forecasts of likely development of demand are of great importance, they are not, perhaps, as easily tuned to in steel as in some other industries.

Mr. Callaghan

How does it find out?

Mr. Davies

It finds out as a result of the consultation which it has with the Government. This is one of the purposes of the review.

Mr. John Morris (Aberavon)

I do not follow the point which the right hon. Gentleman is making. I fully understand the difficulties in tuning to particular needs or demands, but how is the British Steel Corporation to be told over the next 10 years, say, what is the estimate for that period?

Mr. Davies

Clearly, forward estimates of demand for steel and its various products are a necessary part of the estimation. The right hon. Gentleman probably knows that forward estimates of this kind are made in broad brackets of alternative levels of supply. This, clearly, will be part of the basis of the appraisal.

Now, the structural examination of the industry. I have already announced what I think was the major conclusion of this work, namely, to leave the bulk steel making activity intact within the frame work of the British Steel Corporation. We are now making progress in reviewing with the Corporation the remaining parts of the industry. The hon. Gentleman asked when I hoped to be able to make a statement about this subsequent part of the review. I hope very much to be able to make this statement also shortly after Whitsun. It will give an indication of the arrangements which have been discussed and agreed—agreed with the British Steel Corporation, despite what the hon. Gentleman may think—and I shall thereafter continue to keep the House informed on any subsequent developments.

I come now to the fourth part of the reappraisal, that dealing with the relationship between the Government and the Corporation. As the House knows, I am anxious to disengage from excessive involvement in the management problems of the Corporation. A whole series of circumstances have combined to procure a closer involvement than I should wish, notably the scale and the scope of the reappraisal which I have been describing. When the reappraisal is completed, the course will be charted for the future, and the final section of this very great undertaking will come into play, namely, the guidance and control mechanism which has itself been the subject of careful and prolonged study. This will allow for objectives to be set, for programmes to be agreed, and for both to be monitored in an orderly manner so that the management can proceed on its way in confidence and the Government can be sure of how the Corporation is progressing along its planned path.

By the time that is finished, the reappraisal will have constituted an enormous task of prediction and planning appropriate to the scale of this vast industry. It will, I believe, have set the industry on the course of regained prosperity and confidence in its own future.

5.36 p.m.

Mr. James Tinn (Cleveland)

Although this is not my maiden speech, hope to be forgiven if I say a few words about my constituency. From time to time, I have found a certain misconception or misunderstanding in some people's minds, and the thought that Cleveland is in the State of Ohio in the United States. Lest there is any hon. Member under that misapprehension, I should make clear that Cleveland lies on the northern aspect of the lovely Cleveland hills, on the coastline stretching from a few miles north of Whitby, including the old ironstone mines, of which the villages and settlements have new gone, Skinningrove iron works being the sole remaining outpost of steel in that locality. Swinging then north and west to the Tees, one comes to the tremendous steelworks on the south bank of the river, including the development at Lackenby.

To a visitor, Tees-side must seem to have an air of purposeful prosperity. He will see the tremendous physical investment there, the largest petro-chemicals complex in the world at the I.C.I, works at Wilton and Billingham, the oil refineries on both sides of the river, the tremendous port development, and the land reclamation works; and he may have heard that this is the only area of the northern planning region which has over the years experienced an inflow of population rather than an outflow.

A visitor may in that way form a favourable impression. But what he might not see, unless he looked closely, would be the length of the dole queues. Paradoxically, and sadly, although Tees-side and Cleveland have seen the injection of scores of millions of pounds of capital, the dole queues seem to have grown longer all the time.

The oil refineries do not employ many men. I.C.I. has been shedding labour by what is euphemistically called natural wastage, which, in practice, tends to mean that the older workers are shown the door even more brusquely than usual, while school leavers and others find the door closed against them.

As a result, on Tees-side, despite the impression that a passing visitor might have, we already have an unemployment rate which is only marginally lower than that of Tyneside. In terms of numbers, we have more men unemployed than even on Wearside. It is no consolation to an unemployed man to know that the unemployment rate in his area is a little lower than in another. Yet Tees-side, for some reason, is excluded from special development area status.

Our concern today is to look at the steel industry, especially in the light of recently announced plant closures. As I mentioned a moment ago, our unemployment rate is already tragically high, but by the end of this year it could be disastrously higher, because of the area's dependence on steel, for the reasons I have endeavoured to outline. Estimates which take account of previously announced steel closures, in addition to those more recently announced, show by the end of 1971 unemployment on Tees- side could be over 8 per cent., and, in the nearby Hartlepools area, approaching 15 per cent. Surely, by any measure, in any year, by any standards, those figures must be regarded as appallingly and unacceptably high. If those figures had already been reached we should be pretty near the top of the unemployment league. But in this year who knows, when the time comes, what area will be able to claim that dismal distinction.

On Tees-side, however, as I have hinted, there is at least one immediate and practical step which the Minister could take and which lies to his hand. That is to grant the area special development status immediately. Its exclusion can no longer possibly be justified. It is the least the Government can do, and it is something that people of all parties and none on Tees-side unit in demanding. In this I am sure that I have the support of the hon. Member for Middlesbrough, West (Mr. Sutcliffe). I ask the Minister for some assurance on this point. The need is already urgent; it cannot wait.

With regard to the general state of the steel industry, those of us who have worked in it for years have a depressing feeling of having been here before—in fact, of having been here several times before. It has been a traditional problem of the industry that when there is a shortage of steel it is blamed for having failed to lay down sufficient capacity to satisfy the excess demand; yet, in no time at all, it seems often to find itself with a fall-off in demand, with excess capacity resulting in many families losing their livelihoods. It is a spectre that has always haunted the industry and inhibited its planning. But we had every hope—and now I am speaking from the point of view of the trade unionists in the industry—that the Corporation was trying to break free from this crippling cycle, that it was looking ahead, taking a long-term view, the broad international view, in terms of competition and of technological development.

We believe that it was planning to provide this country with a steel industry equipped to cope and compete with the best in the world. That is why the steel-workers, to an extent I believe to be unparalleled and without precedent in British industry, have co-operated with the Corporation in its plans for the future. Inevitably these have meant savage redundancies. The right hon. Gentleman does not need to tell us that; it has been long appreciated in the industry.

Even though the Corporation did its best to improve consultation and to take social factors into account, as it is required by Statute to do, the impact on the men and their families is bound to be savage. It is not easy for those of us more comfortably situated to appreciate what it means to a man who has worked hard on a 24-hour shift system, on bank holidays, at Christmas and at New Year as a matter of course, with skill and responsibility, in an arduous industry where poor working conditions and danger usually go together, but who has, nevertheless through the years managed to attain a position of some responsibility, to find that those years have been wasted and that he can be thrown aside in his mid-forties or fifties as "surplus to requirement".

There is a special quality about the average, typical steelworker. It is an industry which almost seems to breed its own kind of man. Fathers and sons tend to tread the same path—to the blast furnaces, to the melting shop, to the coke ovens, to the mills. They are hard men, yet generous; tough, but friendly; steady, loyal to each other and to their industry; loyal to their firm, even when they are cursing the day they set foot in it. These men, committed to and dependent upon, British steel, have co operated in its plans for its future which threatened their own.

Let me give the House some idea what the cold phrase "technological development" means in real terms to these men and their families. The basic oxygen steel-making process now being introduced can produce an amount of steel in a period measureable in minutes which previously would have taken many hours. It can replace 14 open hearth furnaces with two or three of the new units. It can reduce a labour force of over 2,000 to under 400. These are the facts that were faced up to. It can produce catastrophe in just as many homes if nothing is done, and done in time, to replace each job lost with another gained. The fact that the men and their unions have co-operated in this and similar developments puts a heavy responsibility not just on the Corporation, but on the Government and the country; otherwise, let us stop the cant and hypocrisy of blaming those workers who are sometimes less ready to accept new methods. Let the community face up to its responsibilities in good time, or let the workers and the trade unions look after themselves and their interests alone.

These men are not whining that the country owes them a living; but it does owe them a decent job. We owe their sons and daughters the same range of jobs and career opportunities as they would have had if they had lived in economically more favoured areas. I am sorry to say, even after what the Minister said, that there are disturbing indications that the Government do not fully accept, and are not fully prepared to honour, their obligations in this regard. I hope that we shall have further reassurances on this later.

I will not take up time in repeating criticism of the Government's action over the proposed price increase. But I take the Minister up strongly over his reference to the monopoly position of the industry. Steel can never be a monopoly as long as its customers can buy abroad. But why should they buy abroad when British steel is cheaper than steel on the Continent, as it has been in most cases? As my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said, had the Corporation charged European prices when demand was high, it would now be £200 million better off and would not have needed to put itself and the industry in pawn to the present or any other Government. The critics of public ownership should bear that in mind, and that cheap prices to private enterprise are subsidies in reverse.

But the industry is in pawn to the Government. Its ambitious £3,000 million modernisation programme is undergoing review. The slide rule is being run over it. I am not sure who is doing that, but someone is doing it. The Minister assures us that Lord Melchett has been very co operative. If Lord Melchett and the Corporation have lain down so quietly under this treatment, it is not only capital but a good shot of adrenalin which the Corporation needs to make a more vigorous response to this kind of interference.

I hope that the danger of making a long-term review at a time when the future seems clouded by the present state of trade will be fully borne in mind. The Minister referred to the world shortage of coking coal. At a time of depressed demand for coal, the Labour Government—and I recognise that—closed mines in my part of North-West Durham which produced some of the finest coking coal in the world. I am glad to see my hon. Friend the Member for Consett (Mr. David Watkins) nodding agreement. They were closed because of what the experts said. Some of us did not agree with them. I am afraid that the same calibre of short-sighted experts, with their slide-rules, will be telling the Minister that, from today's viewpoint, the future demand for steel will be much lower than eventually proves to be the case.

I have spoken with some feeling of the sacrifices that the steel workers and their families have been prepared to make to ensure the future of their industry. Now much of it has been called into question. On Tees-side we were braced to accept heavy redundancies—although we did not expect them so soon—but we had promises of vast new development based on the iron ore terminal. Cannot the Minister give us some assurance, even before the long-term review is completed, that these developments will go ahead and that we may have a completely new brown field site based on Tees-side? I assure the Minister that if he has doubts about the viability of British steel on Tees-side he is calling into question the viability of British steel as a whole, because this deep-water site is perfectly situated, and will have the most modern ore-handling equipment, a labour force ready to hand and all the locational factors in its favour. If British steel cannot prosper in that area, then perhaps we had better give up and start buying elsewhere. I believe that it can and will prosper. I hope that the Minister will do his utmost to give some of the assurances for which I have asked.

5.54 p.m.

Mr. John H. Osborn (Sheffield, Hallam)

My right hon. Friend the Secretary of State is as aware as I am that when discussing this particular subject in the House it is dangerous to pay compliments. The steel industry will be relieved that the hon. Member for Ebbw Vale (Mr. Michael Foot) has not its destiny in his hands and will greatly appreciate the statement made today, in addition to the one which was made on 27th April, by my right hon. Friend.

I intervene in the debate with some trepidation as I have not spoken on this subject for two years, largely because, it has been claimed, I have an interest in the private sector, which is in competition with the public sector. There are trade associations and professional bodies where management, technologists, scientists and engineers from competing organisations in the public and private sectors meet. I have continued to attend their meetings, and many have claimed that I had as much right to speak for the public sector as for the private sector, because my interest lies in the steel industry and my constituency is concerned with the public and the private sectors.

There have been continuing discussions in Sheffield and elsewhere about what should be the right balance of plant, the economics of manufacture in this new age and how much more rationalisation should take place. As an outcome of that, Sheffield Rolling Mills—a combination of the Tinsley Mills of the English Steel Corporation, Balfour Darwin and Hallamshire Steel—was created by the Labour Government.

In my discussions, particularly with those who work in the industry and those connected with the trade unions, including B.I.S.A.K.T.A., I find that there is an increasing realisation that our productivity is still way behind that of many other countries. I have been told that the modern plant is capable of producing 700 tons per man per year. Some of the better plants in America are producing 300 tons. The American average is 200 and the United Kingdom average is 100 to 125 tons per man per year. I should like my hon. Friend the Minister for Industry to comment on the productivity in other countries compared with that in this country.

Trade union leaders are aware of the need for modernisation. As someone involved in the industry, I have emphasised in the House over the last 10 to 12 years the need for continuing capital investment in industry, as well as in the steel industry. Those who have spent their working lives in the industry want a healthy bulk steel industry and a healthy carbon steel industry as well as a healthy alloy, special and stainless steel industry. They want to see a healthy private and public sector activity. It is generally regretted—and I made this point when I intervened in the speech of the hon. Member for Ebbw Vale—that as a result of nationalisation so much rests with the Government and that so much decision-making is not being done outside Government. There is resentment that steel is being debated with such intensity in the House, because it is thought that these issues would be more effectively dealt with outside the House and away from Whitehall.

I wish to ask my right hon. Friend the Secretary of State a few questions. The first concerns the headquarters of the British Steel Corporation. It was reasonable to move from a regional to a product basis, but the result was another round of musical chairs within the Corporation, and this led to greater bureaucracy combined with a policy of centralisation. During the Committee stage of the 1966 Iron and Steel Bill—the Iron and Steel Act, 1967—hon. Members on both sides hoped that a massive headquarters would not be erected in London but that it would be situated outside London. May we have more information about the size of the headquarters in Grosvenor Place, how many staff are employed, the annual salary bill and what it is costing to run?

I ask that because a retired manager of a plant in Sheffield, which, in my view, probably has a turnover of £20 to £25 million a year, said that, of his total overheads of £3½ million, £2½million represented plant overheads and £1 million went as a contribution to the headquarters in London, and he wished to know what good it was doing. I should like my hon. Friend the Minister for Industry to try to give an answer, as this is but one example of the unease which is developing in Sheffield.

Of course, at local and plant level there is need for greater autonomy. There is a view, which is prominent now, that at the headquarters with all its complexity, there are too many economists, statisticians and whizz kids. Therefore, I draw my right hon. Friend's attention to the fact that there is growing resentment in Sheffield, in the public sector, of course, but in the private sector, too, that the real decision-making has been taken from the city which knows how to run its own affairs and that the real decision-making is now in London, and even the special steels division has not the autonomy which many in that division would wish to see.

The new Sheffield management in the steel industry, public and private, realises the value of the corporate plan, modern management techniques, including computer technology, but holds the view that more of the decision-making should be at local level. I hope, therefore, that my right hon. Friend is aware that Sheffield wants to be allowed to manage the industry which it has known for years, and wants to see less decision-making being done in London, in Whitehall and Westminster.

Mr. Thomas Swain (Derbyshire, North-East)

The hon. Gentlemen is expounding the management's point of view, but is he aware that this is not a view shared by the trade unions?

Mr. Osborn

May I read the next sentence in my notes? This view is shared by the shop floor as well as management to an increasing extent. I thank the hon. Gentleman for his intervention. I will show him my notes, if he doubts me. I read from page 7 of my notes.

Mr. Eddie Griffiths

Will the hon. Member allow me?

Mr. Osborn

Let me finish this please, otherwise I shall make a longer speech than I intended.

The United Steel Company, for instance, perhaps the most progressive steel company in Europe, and highly profitable, some five to ten years ago, now finds morale from top to bottom at a low ebb. In Sheffield there has been reported the highest unemployment figures for 30 years.

Mr. Eddie Griffiths

The hon. Gentleman is making the point that the shop floor supports the view for autonomy in Sheffield. Will he accept from me that shop stewards and shop floor representatives at Firth Brown sent a resolution to the Labour Party headquarters demanding that Firth Brown, which has probably the biggest private sector plant in Sheffield, ought to be nationalised? Will he also accept the view that we are being inundated regularly by demands from Shepcote Lane rolling mills that the Corporation should take over 100 per cent. of that plant?

Mr. Osborn

I think that what shop stewards say does not necessarily reflect the view of the shop floor.

Mr. T. H. H. Skeet (Bedford)

Just misguided.

Mr. Osborn

The fact is that there is unease, and, firstly, the blame for this must rest on hon. Members opposite and their decision to nationalise, and then to renationalise after denationalisation. Secondly, there is some responsibility on management of the British Steel Corporation at the present time.

At a private gathering I was talking about the difficulties facing Lord Melchett and Mr. Finneston, and the scale of activities which they must resolve. The Minister should know that there is growing unease not only by some in the public sector but by its customers and suppliers, that if there are difficulties it was Lord Melchett's and Mr. Finneston's responsibility for taking up this impossible task given to them by the past Government. It has been to my surprise that I have been criticised for understanding and supporting this task which was placed upon Lord Melchett. But my right hon. Friend should bear in mind that Lord Melchett and those running the British Steel Corporation are subject to growing criticism.

Because it brought about more certainty I welcomed the statement of 27th April that the industry should remain intact. It is quite obvious that I would wish Lord Melchett to stay in this position, but I think that that outside anxiety should be noted. I shall read my right hon. Friend's pronouncement about the future of the industry with very great interest, because obviously we are not going back to separate companies as pre-1967.

The question of fair competition arose in our debates on nationalisation and the public sector is competing with the private sector, not only in steel, but throughout industry, for capital. Fair trading and fair competition will, I hope, be looked at, but what is important, and my right hon. Friend pointed it out, is that we are talking of an investment of £185 million this year and an investment to build up to £290 million, I think my right hon. Friend said, in future years. This is an immensely greater investment than had been undertaken by the steel industry, even in the years of the Labour Government.

With this investment the question of pricing arises as well. It would be useful if we could have some indication about international prices compared with those now being set as a result of the increase of 7 per cent. instead of a 14 per cent. addition after the April discussions. It is fair to say that the average increase in steel prices from June, 1969, to April, 1971, has been 23 per cent. It is not as great in the case of alloy steel, much of which is made in the private sector. Carbon billets, I am assured, have gone up by a much greater figure than this; namely, 36 per cent.

In the private sector there are many companies which have to purchase material, including billets, from the public sector. It is possible that with the best will in the world, manufacturing suppliers are tempted to supply to those who carry out finishing operations in competition with their own subsidiary activities at unfairly high prices unless there is competition. When the industry is restructured it would be right for my right hon. Friend to be aware that the private sector desires an alternative supply to the public sector for its billets, so that there can be competition. This, no doubt, will come out in the November Memorandum, but I hope my right hon. Friend will comment on this.

As regards prices, the British Steel Corporation must be given freedom, but if it is to have freedom of prices, then not all the capital it requires should come from the Government. Whilst I welcome the statement by my right hon. Friend that more capital should be generated from the steel industry's own resources—of course the steel industry should make profits and plough back profits for its own capital development; that is the reason for the Question which I tabled today—at the same time it could sell off capital assets which are not directly concerned with what it is in business for, and it should be encouraged to take part in joint ventures with outsiders. I am very glad that this encouragement is being given by my right hon. Friend.

My right hon. Friend spoke about international activities, including the manufacture of pellets. I went to a flotation and briquette plant in Venezuela at the Sidor works some months ago, where pellets of 86 per cent. iron content are being manufactured for the steel industry in the United States of America. It is right that there should be a British investment in these activities.

I hold the view, which I have held throughout our debates on steel, that the British Steel Corporation is too large and too diffuse. I think it right that we should review the structure of the Corporation. Some activities could well be part of international activities, perhaps based on the United States of America, and this might even involve a whole product group; and other activities could be in a European context. All this, I understand, will now be part of the long-term review, and I look forward to hearing of the outcome of this review when it is made public this year or early next year.

There are many more observations which I would have liked to make in this debate, but there is not time. Undoubtedly the debate is taking place as a result of the decision to nationalise steel. Many of the issues which we are now discussing should not, in my view, be discussed in the House of Commons. In some cases the Government should act as referee, and there should be outside agencies for achieving this.

In the British Steel Corporation there is a new management learning how to run an industrial dynosaur. It is still learning, and the bankers—namely, the Treasury, which will have to provide the necessary—are right to investigate every activity and undertaking, because the Corporation is running on an unprofitable basis.

No private concern would bring 14 large companies together in one fell swoop as was done on the nationalisation of steel without expecting the most ghastly and complex——

Mr. Skeet


Mr. Osborn

As my hon. Friend says, "mess". Today's difficulties are the inheritance of measures taken by the Labour Government when they decided to nationalise the industry. But my right hon. Friend has given us a blueprint for the future of the industry, and I welcome the content of his early contribution to the debate, and beg to support his Amendment in the Lobby this evening.

6.10 p.m.

Mr. George Lawson (Motherwell)

It is strange for a representative of the steel industry to welcome intervention by the Treasury. He is calling upon the Treasury and the bankers to scrutinise the plans of the British Steel Corporation, to decide what those plans should be and to approve or reject them. This is rather comical, coming from an hon. Gentleman opposite.

The line taken by hon. Gentlemen opposite is that the Labour Government caused it all and, had it not been for the threat of nationalisation, the steel industry would have been well ahead of that of any other country. Hon. Gentlemen forget that the steel industry of Britain was on its knees during the inter-war years, when there was no question of a threat of nationalisation. In many ways the war saved the steel industry. Long before the threat of nationalisation became a political proposition, the State was called in at the behest of the steel industry to protect it. Even after the steel industry had been nationalised, and denationalised, during the 13 years of Tory Government, there was no suggestion that the industry should be returned to a private enterprise form of control. There was a disguised restitution of private enterprise, but the industry functioned under many controls and protections. It is a long time since we have had a private enterprise steel industry.

When nationalisation is used as a reason for the state in which the British steel industry now finds itself, hon. Gentlemen should remember that this situation is not unique to that industry. It is characteristic of a large part of private enterprise. For example, the shipbuilding industry was one of the industries of which we were most proud. The term "Clyde built" was enough to warrant that a ship was one of the finest ships ever to sail the seas. That industry was not nationalised, yet the state it reached was such that a Minister could say to a Select Committee that the shipbuilding firms on the Clyde kept no proper accounts. They did not know what the ships they were tendering for would cost, and they were in a state of hopeless muddle. This is characteristic of large areas of private enterprise.

The nationalisation of the steel industry was an attempted rescue. The industry has not yet been properly rescued, because the process of putting it on a sound competitive basis has been interrupted. We hear much about the deep-seated review which the Government are undertaking, and this is comical coming from hon. Gentlemen opposite. I can remember how they mocked at the National Plan propounded some years ago by Lord George Brown. They mocked at the idea of long-term planning, but here is long-term planning with a vengeance.

Every aspect of this great industry is to be looked at by civil servants, gentlemen from Whitehall. They will no doubt consult the industry, but the gentlemen from Whitehall will have the last word. The gentlemen from Whitehall will tell the steel industry what size it should be. When the industry produced plans for building up capacity by 1975 to 35 million tons, these plans were interrupted and halted. We are told that they have not been halted. I and other hon. Members have asked questions about the plans, for example, for 1971–72, and have been told repeatedly that Ravenscraig has not been halted.

The Secretary of State for Employment gave the House a categorical assurance that the Government were not holding up the Ravenscraig plan or any other plan, apart from Llanwern. The Government said that things must stop until we have a short-term review. Presumably, nothing was halted except Llanwern. Yet they cannot go ahead. I do not know what is being reviewed, unless it is an abstract amount of £185 million upwards beyond £200 million, and whether the country can afford to spend this amount of money on steel investment. I cannot make any sense out of this position. To my mind the Ravenscraig scheme was held up, and so were the others and the Steel Corporation has repeatedly said this.

The hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) spoke of the objections emanating from the shop floor in Sheffield about the decisions concerning special steel being taken elsewhere. My hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) and I could go to our constituencies and find men on the shop floor objecting to decisions on special steel which are being taken in Sheffield. They object to a section of the special steel industry, which they always assured us was—and still is—a very profitable section, being under threat of closure to benefit a section of the special steel industry in Sheffield. They put it to my hon. Friend the Member for Rutherglen and myself that if the special steel industry is making money there is no reason why it should be closed down to benefit some unit in Sheffield. I have a fair measure of sympathy for that.

We have to remember that only a relatively small part of the special steel industry has been nationalised. I looked at the position of that industry vis-à-vis overseas competition. According to figures in the Financial Times, in 1955 the United Kingdom was second highest among the seven principal producers of stainless steel in the free world. By 1969 we had dropped behind every one of those countries except Italy, which was rapidly moving ahead. Probably by now Italy is substantially ahead of us. When we measure this against what has happened elsewhere we cannot preen ourselves on how well we have been doing.

The Minister talked about decades and he was right to do so. There has been something characteristic about British industry, and not just the steel industry, for decades which has resulted in us falling behind. Those of us who backed the nationalisation of steel hoped that we might stop that and build the industry up. We listened a few weeks ago to Lord Melchett talking about the state of the industry when it was taken over. I am not betraying any confidences when I say that Lord Melchett said that not only had there been inadequate investment but there had also been inadequate maintenance.

Lord Melchett said that merely to replace the industry on the basis of existing capacity, which is now very small compared with its principal competitors, would cost something like £2,500 million. So much of the industry has dropped behind any ordinary measure of efficiency. When we consider this figure we begin to appreciate that unless substantial expenditure is undertaken rapidly we can forget any ideas that we will become one of the principal industrial nations of the world.

This is the principal accusation which I level against the Government. They have interrupted a programme which has been worked out by those who know much more about steel-making and the possibilities of development than the genelemen from the Treasury. They have interrupted what many of us on this side of the House thought was a modest development programme which would build up capacity by 1975 to 34 million tons and then take it beyond. Look at what is happening elsewhere. Let us take the Common Market countries. In a recent publication from the European Community research and development organisation the modest annual rate of growth for the steel industry for the Six of 4.7 per cent. was given, rising, if things improved, to 6.2 per cent.

That substantially exceeds the level of growth that the Corporation has set for itself by 1975. The Corporation's aim is not over-ambitious. It gives us a chance of maintaining a position among the steel producers of the world but by no means the foremost position.

It was hoped that by taking certain measures the industry would become more efficient. The brownfield sites scheme was to utilise various sites, and there were relatively few, which gave the opportunity of speeding up the advantages accruing from the capital invested. This was one of the reasons for selecting Ravenscraig. It had a steel-rolling and finishing capacity about twice its steel-making capacity. The idea was to step up the making of steel so that the industry could utilise to the full its finishing capacity.

The Government have interfered and taken upon themselves the rôle of the judge and the rôle of the expert, who scrutinises and decides what has to be done. They must recognise that by itself the industry cannot find the means of developing the kind of capacity that we all agree it must have, irrespective of whether we agree about nationalisation. Without this level of efficiency we will not be one of the world's leading producers.

We need less interference from the Treasury and more backing. I am sure that on this basis the industry will show that it has the capability to achieve 43 million tons by 1980. There is no question but that the men in charge of the industry know how to produce results speedily. This is being shown in the Scunthorpe area. Figures have been achieved at Lackenby which could be achieved elsewhere. On this basis the industry can become a thriving industry.

I want to deal now with Lanarkshire, where we have a contracting industry. A few years ago it represented about 20 per cent. of the steel-making capacity of the United Kingdom. That has steadily reduced to about 10 per cent. and it has been running at about 10 per cent. to 12 per cent. for some time. On the Scottish steel-making industry depends a large part of the remainder of Scottish industry, and if we are left with a fragment of a steel industry, with that industry unable to develop fully along with the rest, then there will be very strong feeling in Scotland.

Scotland has played a large part in the building of this nation. It has many great advantages—and I will not develop the theme of the deep-water ore terminal or the possibilities of the green field development area. There are rival claimants. We expect to see the developments earmarked for Scotland, notably Ravenscraig, to be carried through as promised. My understanding was that we were to have a statement before the end of this month. In any event, we expect to hear from the Government very soon that those schemes will go ahead.

The Government have taken upon themselves the rôle of judge, the rôle of the body which can say "Yea" or "Nay". Upon the Government will rest the onus if the nation is not able to get ahead speedily with solving the problems facing it, which are so well understood by those who are in charge of the steel industry.

Several Hon. Members rose——

Mr. Speaker

Order. I make the comment, and I do not do so in a critical sense, that the hon. Member for Motherwell (Mr. Lawson) spoke for over 20 minutes. In the remaining 2½ hours, there are at least 10 hon. Members on the Opposition side and several on the Government side who wish to speak. I must ask for shorter speeches.

6.30 p.m.

Mr. David Lane (Cambridge)

I have no direct constituency interest in steel. Cambridge wants more industry, but not a steel works. Nor have I to declare a personal interest in steel, in the normal parliamentary sense. However, I worked for the British Iron and Steel Federation in the late 1940s and throughout the 1950s, and no one who has had any connection with the steel industry can fail to have a permanent interest in its fortunes or to feel admiration and concern for those who work in it. I am very well aware of the anxieties in the steel communities and constituencies today.

As my right hon. Friend the Secretary of State said, we are concerned mainly with the present and the future. I regret that the hon. Member for Ebbw Vale (Mr. Michael Foot) persists so often in taking off from reality into extravagant flights of fancy and distortion, for I do not quarrel with some of what he says. However, before coming to the present and the future, we must take a glance at the past.

Right hon. and hon. Members opposite have a nerve when they accuse this Government of causing uncertainty. Since 1945, when the first nationalisation proposal came forward, hardly a year has passed without those in senior positions having to keep glancing over their shoulders at what was going on in the political arena. The Labour Party must be held primarily responsible for that distraction. It does not lie in the mouths of hon. Gentlemen opposite to accuse my right hon. and hon. Friends of causing uncertainty.

I hope that the House will endorse the Government decision to carry out these reviews. Any new Government taking over in the circumstances that my right hon. and hon. Friends found last summer were bound to undertake reviews of this kind. Intensely difficult problems face them. There is the relationship between Government and nationalised industry, which has not been solved in the postwar years by either major party. We want more commercial freedom, of course. But, so long as the Government have to provide most, if not all, of the capital, it is inconceivable that the Government can wash their hands of what any industry is doing. We are still groping for the right relationship.

There are peculiar difficulties in steel. Production is sluggish because of world recessions. Customers are discontented, and, regardless of what the Government may do, the British Steel Corporation should take action to improve its customer relationships. The financial results are poor. The industry is losing money at the rate of about £1 million a week. Meanwhile, the technical revolution goes on, with which many hon. Members are far more familiar than I am——

Mr. Roy Hughes (Newport)

Is not it a fact that the industry is losing £1 million a week because the hon. Gentleman's Government refused to allow the increase for which the Steel Corporation asked?

Mr. Lane

I do not accept that. The Government's decision has had some effect, but to nothing like the extent of the figures that we are discussing. For a number of reasons, the financial climate has turned bad for the industry in the last year or two. Instead of rushing to censure the Government, fair-minded observers should have sympathy with the inheritance that my right hon. and hon. Friends took over last summer and show more understanding of the real problems.

I have three brief pleas to make. The first is that the Government should carry out these reviews with maximum speed and urgency. I know from correspondence with Ministers, especially with my hon. Friend the Minister for Trade and Industry, that the Government are aware of the problem of morale at the present time. A number of my friends and former colleagues in the industry, who have never advocated nationalisation, are worried by the continuing uncertainty. They have had nationalisation; they had the reorganisation two years ago into product groups; now there is the possibility of more. We all want to see a secure basis for the future as soon as possible.

Secondly, the Government should make a firm declaration, and my right hon. Friend virtually did so today, that British steel will stay in the front rank among the world's steel producers. We should not aim to be 100 per cent. self-supporting in steel. We never have been. Equally it would be a mistake to rely to any substantial extent on imports. We know that the industry, for a variety of reasons, is suffering from overmanning and under-investment. These matters have to be put right. Total capacity must be expanded further. Even more important, the percentage of modern plant has to be increased greatly in the next few years. We have a fine tradition of skill and pride in the industry. We have the foundation for the future, and the best of our plant is as good as any in the world. On this foundation, we can hold our own, to the benefit of the British economy and not least the balance of payments, if a major investment programme can be sustained for many years ahead. We want to concentrate on a few very large integrated plants in Scotland, the North-East Coast. Immingham—Scunthorpe and South Wales. The pattern is already developing. My right hon. Friend spoke about a new greenfield plant, and there has been talk of the Thames Estuary. I hope that that will be considered by the Government. We shall also need cold-metal plants at suitable sites inland. Above all, let us have growth and optimism and not decline and doubt.

My third plea concerns the structure and ownership of the industry. I am sure that my right hon. and hon. Friends keep in mind what we said in our election manifesto. The Government are already busily carrying out their election pledges, as the House recognises. In our Manifesto we said: We will progressively reduce the involvement of the State in the nationalised industries, for example in the steel industry, so as to improve their competitiveness. An increasing use of private capital will help to reduce the burden on the taxpayer, get better investment decisions, and ensure more effective use of total resources. I am sure that my right hon. Friend was right in the decision he announced a month ago that the main stream of bulk steel making should stay in one total organisation within the present British Steel Corporation structure. To carry out that election pledge, the most urgent need is to restore the main stream of steel making to profitability at the earliest date; then it will be increasingly attractive for private capital to come into the industry, to bring the extra disciplines of private capital, to reduce the strain on the Exchequer, which at present has to find the whole of the new money required, and, not least, because this is the germ of an eventual solution that we all want, to remove the industry from politics once and for all.

There has been talk of a B.P. solution. I hope that something on those lines can be worked out. It may not be precisely parallel to the structure in B.P., but I hope the Government can evolve some system where, progressively, more private capital is injected into the main stream of bulk steel-making, which must first be restored to profitability.

My view about hiving off is that this should not be a case of major surgery. It is more one of rearrangements on a fairly modest scale. Anybody connected with the industry knows that it is impossible to draw tidy boundaries around it. That was one of the main reasons against the Labour Party's original nationalisation. There are, of course different sectors of the industry, including tools, special steels and the rest, which cut across the dividing lines between manufacturing and fabricating. Sometimes on one site there is a wide spread of functions and sometimes there is total integration. I hope that we shall see some rationalisation and tidying up of the boundaries between the public and private sectors, but the first objective must be to keep the mainstream of steelmaking profitable.

I hope that in the central organisation, as it develops, there will be a slimming-down of what many people regard as an undue increase in the non-productive, administrative and overhead sides of the industry. If there is to be rationalisation among those engaged in operations, as there surely must be throughout the iron and steel making sectors, this must be matched by similar rationalisation on the non-productive side of the industry.

The Government are being unfairly criticised where they should be supported. I hope that within a few months major decisions will be taken so that the industry is set on a new course towards an expanding and profitable future, with an increasing rôle for private capital. Above all, I hope there will soon be reassurance about the future for the men and women who are devoting their talents and efforts to the industry and whose livelihoods and those of their families are at stake.

6.42 p.m.

Mr. Barry Jones (Flint, East)

I understand your request for brevity, Mr. Speaker, but I should like to take up quite briefly what was said by the hon. Member for Cambridge (Mr. Lane). He raised the matter of possible green field sites. It rather seems that he had a pin hovering over the map of Britain, but he did not seem to indicate any likelihood of such a site going to North Wales. Since I represent a large steel making constituency in North East Wales, I am sure the hon. Gentleman will forgive me if I mention—I shall not go into the matter in detail, since none of us wishes to conduct an auction about green field sites—that the Shotton works in Wales are adjacent to the M6 spur, have access to a deep water port and are part of an area which is brilliantly administered by the Flintshire County Council. The works are also adjacent to the steel-hungry Midlands. I will not pursue that point, although one could make a good case for locating a green field site on the banks of the River Dee, possibly on reclaimed land.

Mr. Roy Hughes

Would my hon. Friend also bear in mind that there are green fields in South Wales as well.

Mr. Jones

I am well aware of that, and there are also green valleys, too. I have come here not to bury the British Steel Corporation but to praise it. I believe that the Chairman heads an impressive conglomerate. I feel that the Corporation has often been somewhat unfairly criticised. It has a quarter of a million employees, it is the seventh largest corporation outside the United States, and it has direct exports of some £200 million a year, and its contribution to the industrial scene of Britain is second to none. Yet at this stage it is, to use a boxing term, reeling like Cassius Clay in the fifteenth round. The denial of £100 million in investment grants in future might be termed as something of a vicious kidney punch and, as an additional bit of eye-gouging, it has to suffer from the relaxation of the scrap import controls.

I should like to make one point about stockholdings. Everybody wants to see the Corporation a little more "in the black" and a little less "in the red". I believe that an examination of the steel stockholding would indicate a possible line of action that the Government might take. I recollect that the stockholding business in steeel has waxed fat since vesting day and the Continental producers are considering whether they might take over one or two of these steel stockists in the United Kingdom. The Government might consider allowing the Corporation to have a little of the steel stockists' gravy. I believe that the figures of the steel stockholders' turnover amount to some £300 million a year. There is surely food for thought in that sphere.

There is gathering gloom and apprehension in my constituency about the steel industry. The sooner that decisions are taken the better and the sooner they are made known the better. I would instance what has happened about the future of the Shotton steel works in my constituency. We assumed that, with luck, we would get a green field site development. We assumed that, if we were unlucky, we might end up with a heavy site being closed down and with rolled steel being taken from Scotland and South Wales where there are other green fields. We consider that it might be possible, if the Government do not go ahead with a green field site, that Shotton might have new electric furnaces and have therefore the right to exist in the generation that is ahead. It is already being said by the younger people that there is no future in the steel works at Shotton, and that it is likely to be run down. It is time to pose the question whether there will be an announcement soon as to the future of the steel works there.

It would be proper in such a debate as this to indicate the qualities of the steelmaker himself. He tends to be overlooked. I would not say that steel men in East Flintshire are very different from steel men in South Wales or Scotland, but they have a very special quality. It is a quality of human warmth and comradeship and brotherhood in the making of steel. Perhaps it is to do with the heat and warmth of the metal on which the men work. It is therefore extremely disappointing that the Corporation, and ultimately the steel workers, have had to suffer the uncertainty and climate of doubt which has bedevilled the situation. Therefore, I hope that in the very near future, many of these doubts and fears may be put at rest.

6.48 p.m.

Mr. Patrick McNair-Wilson (New Forest)

When I made my maiden speech in 1964 I chose the subject of the steel industry, which I had then recently left. At that time the then Labour Government, which had recently assumed office, were making extravagant pleas that, with the British steel industry in the hands of the State under nationalisation many of its problems would disappear. However, here we are some years later taking part in this debate having heard from the hon. Member for Ebbw Vale (Mr. Michael Foot) in his opening speech that he feels that the Government are interfering too much. The simple fact is that there is no simple answer to the problems of the British steel industry. There is no particular magic about private enterprise, nor about public ownership. This industry used to be described by the Labour Party as a commanding height, but now those people who work in the industry must realise how vulnerable is the fortress which they are defending. It is this industry above others which is so subject to the vicissitudes of life.

Therefore, the Motion before the House is utterly wrong in that it talks of a persistent uncertainty over the last year. This uncertainty has lasted not only for 20 years but for almost as long as anybody in the House can remember. The reasons are simple. We are as an industry all the time facing changes in the economic climate. In addition, there are various other challenges which the industry has to face, not least of which is the increasing supply of steel from countries other than the major steel producers of the past. One of these countries is Japan. We see from the figures that in 1955 steel production in Japan reached a figure of 9½ million tons, whereas in 1970 that figure went up to 98 million tons. That is an upward trend of something like 12½ million tons every year in the recent past.

On the other hand, looking at United Kingdom capacity, whereas this year we have a planned capacity of about 26 million to 27 million tons, a figure which has not altered considerably over the last 15 years, and in 1975 we are planning for a figure of approximately 33 million to 35 million tons, depending presumably on the outcome of my right hon. Friend's survey, we can see that Japan has swept forward as a great major steel producer.

Why? Japanese home demand for steel has gone up by 15 per cent. a year whereas our home demand for steel has gone up by little over 3.5 per cent. Our steel industry is dependent almost entirely on the performance of the economy as a whole. It is always a very good yardstick for any economy to see how the British steel industry is doing in relation to our economy. It is impossible to lay at the feet of any individual Government the reasons, and I do not intend to do so, but I make the point that the British steel industry is a victim, not a cause, of the situation with which it is faced.

The British steel industry has had to face three major challenges since the war: technological, economic and political.

Technologically, the situation facing the British steel industry—indeed, perhaps all steel industries—was when in the late 1940s the first major oxygen converters were tried out in Austria. When they became the relevant modern way of making cheap bulk steel the open-hearth furnaces in Britain were out-of-date overnight. There are still 15 major works in Britain, of which Irlam is one, with old open-hearth furnaces. If those works are to be brought up to date they will have to be completely refitted or there will have to be a new rationalisation.

We had the oxygen converters coming in in bulk in the late 1940s the electric arc furnaces, and so on; but technologically at the end of the war the industry faced big challenges. Because there was so much investment already in old open-hearth plants it was not economic or perhaps even politically right to make a major change.

Mr. Eddie Griffiths

Many of the open-hearth plants are obsolete, but does the right hon. Gentleman agree that many are unfortunately in the wrong geographical places to cash in on large B.O.S. plants?

Mr. McNair-Wilson

The hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths) has completely taken my point. I can think of many plants in the position which he has described.

We have had other developments which are well known to hon. Members, like continuous casting and perhaps even direct reduction, which I have a feeling may be coming along ultimately. It may be that with pelletised ores this will happen.

Then there is the economic challenge of the desire for new large investment At the moment we have one 3 million ton plant at Port Talbot, one 2½ million to 3 million ton plant at Appleby-Froding-ham-Redbourn, and five 1½ million to 2 million ton plants at Ravenscraig, Lackenby, Shotton, Llanwern, and Steel Peach and Tozer. The last represents the biggest thing we have in steel making. When we set that against the developing pattern in Japan, Russia and the United States, we see how far down the ladder we are.

It is now becoming clear that the kind of figure at which we should be aiming is a plant of approximately 10 million tons. That is an enormous plant. We have not got anything even a third that size. That will cost approximately £1,000 million to construct. One can immediately set that in the context of the figures of investment about which we were talking earlier. For instance, by 1980 Japan will have the N.K.K. plant at Fukuyama producing 16 to 20 million tons, and Italsider at Taranto will be producing 9 million to 10 million tons, and we are already into the 1970's. If we desire to go for this big plant we must make sure that it will be fully utilised.

One problem is that at Llanwern and Ravenscraig this has not been the case. This point was brought forward by the hon. Member for Motherwell (Mr. Lawson). The siting of those two plants, even though done by a; Conservative Government, was a judgment of Solomon—it pleased nobody and provided no answer. This was, with hindsight, a wrong decision. So we have the problem of size and the cost of the investment.

We then have to look at where these sites should be. Hon. Gentlemen opposite would like sites in their constituencies. I can understand that. However, we have to think of the deep-water terminals where we can bring in the big ore carriers if we are to get the economy of size. The hon. Member for Cleveland (Mr. Tinn) made a plea for the deep water terminal in his constituency. This is a matter which I am sure my right hon. Friend will be locking at.

In the economic challenge we must consider prices. I do not wish to go into this matter in detail, but I am not sure that we are right to control prices if it means passing on any increased cost or losses to the taxpayer. If we truly want the industry to be an economic unit, then we must allow it to charge the right price for its product. Last year we had the ridiculous situation of rationing structural steels because our price was too low, and this year we are closing plants. Therefore, we must have the price level which truly reflects the cost of the product we are making.

The third challenge is that of politics. The British Steel Corporation is unlike all the other big units in the world in that those big agglomerations came into being because of commercial need. The British Steel Corporation came into being because of political expediency. The two do not make happy bedfellows. To get the best commercial entity or commercial unit, political expediency is unlikely to provide the best answer.

My hon. Friend the Member for Cambridge (Mr. Lane) pointed to the time when he was in the British Steel Federation and the attempts which have been made since the war to nationalise the industry. In every case they have created the uncertainty to which my hon. Friend referred. I believe that the British Steel Corporation will have a more difficult task than almost any other steel industry in the world merely to overcome this political problem which was created when it was brought into being.

Rationalisation is never easy or pleasant. It often means a restructuring of the labour force. The hon. Member for Ebbw Vale pointed to the lesson of the coal industry. We have to be very careful. There is a bright future for the coal industry, but we may have realised that too late. I hope that we shall not do that with the British steel industry. There is a real place for this industry. It is bound to feature in political discussion. For the sake of those earning their livelihoods in it, I hope the Goverment will not make it a plaything of politics.

6.58 p.m.

Mr. David Watkins (Consett)

I listened with great interest to the hon. Member for the New Forest (Mr. Patrick McNair-Wilson). I hope that he will forgive me if I do not follow too closely along the well informed line of argument which he has developed although in my speech I may touch on some of the points he made.

I thought that the speech of the Secretary of State was notable for its omissions rather than its commissions. The right hon. Gentleman is a member of a Government whose negotiations to take this country into the European Economic Community are at an advanced stage. He introduced from the Government benches a major debate in the House on the steel industry, which will be vitally affected one way or another by the success or failure f our application. Yet, in his speech, there was not one word about the steel industry in relation to our application to join the Common Market.

When we consider the position, the omission is the key to much of the Government's action which has caused so much uncertainty in the industry over recent months. In spite of the noises being made in some quarters, and no less in spite of the noises not being made in some quarters, the fact remains that the size of the British steel industry is one of the major problems of this country's application to enter the E.E.C. The Common Market Commission has repeatedly shown that it is wary of allowing a steel company, or group of companies, to produce more than about 12 per cent. or 13 per cent. of the total steel output of the Community, because it reckons that any company, or group of companies, which produces more than that distorts the pattern of competition which is written into the principles not only of the Treaty of Rome, but of the Treaty of Paris which brought the European Coal and Steel Community into existence long before the Treaty of Rome came into being. The British Steel Corporation currently produces about 18 per cent. of what would be the total steel production of an enlarged Community should this country's application, and that of the associated countries, prove successful.

I am aware that on 5th May one of those mysterious, anonymous spokesmen announced from Brussels that it was not expected that the size of the British steel industry would be any problem in regard to this country's application to join the Common Market, although there would be concern about certain of the marketing methods of the British Steel Corporation. I shall come back to say something further about the anonymous spokesman. I want, now, to touch upon some of those marketing practices, because they would complicate this country's entry into the Common Market.

One of the complicating factors is the dominating position of the Corporation in the British market. Another is the Minister's powers, which can be exercised, over the industry. A third is the very existence of the Iron and Steel Consumers' Council because, in terms of the Common Market ideology, the Iron and Steel Consumers' Council detracts from the independence of the industry in determining its own marketing and other policies and puts intervention in the industry into the hands of a body established by the Government themselves.

Those factors being present, it is perhaps not surprising that the right hon. Gentleman was so silent because, when the Government made their intervention in the pricing policy of the Corporation, they used the Consumers' Council in their manoeuvres to cut down the applied for increase by half. By doing that the Government have made the economic operation of the Corporation impossible. They have put the Corporation in the position of subsidising the consumers of its products, many of whom are not subjected to the same degree of control over price increases, by which they are more than able to make and cover the additional cost to them of increased steel prices. Above all, by their interference, the Government have seriously under mined the Corporation's ability to assist in the financing over the next decade of the necessary capital investment for the growth, expansion and modernisation of the industry.

One of the supreme ironies of the use of the Consumers' Council by the Government in the price structure of the industry is that this has been done by the Government who are committed to entry into the E.E.C., yet they could not have done that had we already been in the Common Market. I think that we are entitled to ask whether this interference by the Government, who are supposedly dedicated to non-interference in industry, together with the hiving-off threats, about which we continue to hear so much, was a backstairs move to break up the Corporation and thus facilitate the acceptance of the British Steel industry by the Common Market Commission. Having listened to some of the speeches of hon. Gentlemen opposite, my suspicions are not allayed, but increased.

Mr. Skeet

Is the hon. Gentleman correct? Italy has interfered with the price of steel, and also with the price of oil. I should have thought that it was compatible with the Treaty of Rome to interfere with prices.

Mr. Watkins

The industry in Italy is not in the dominant position that the Corporation is in the market in this country, and that is one factor which explains the difference. I noticed that the hon. Gentleman nodded when I referred to the ideology of the Common Market, so I presume that he would not disagree with my analysis of the situation.

Mr. David Crouch (Canterbury)

Is the hon. Gentleman saying that from his side of the House there is no suggestion, and would be none, of Government oversight of vast increases in prices? Does he not remember the Prices and Incomes Board which was set up by the Labour Government to do just that? Is he saying that it is not the Labour Party's policy to oversee prices?

Mr. Watkins

I am saying nothing of the sort. The Prices and Incomes Board was established to carry out a thorough investigation into prices in a completely independent manner, but it was wound up by the Conservative Government, who have therefore done away with that kind of machinery.

Mr. Eddie Griffiths

Would not my hon. Friend agree that the Prices and Incomes Board dealt with applications, without fear or favour, from both the private and the public sector, whereas the Government's policy is fear for the public sector, and favour for the private one?

Mr. Watkins

I agree with my hon. Friend, who has succinctly and accurately summed up the Government's approach to this matter.

I said earlier that I would return to the question of the anonymous spokesman who, on 5th May, said that the size of the British Steel Corporation presented no difficulty in regard to this country's entry into the Common Market. Viewed against the background which I have outlined, and bearing in mind the principles embodied in the Treaty of Paris and in the Treaty of Rome, I find it difficult casually to brush aside, in the almost offhand manner of that spokesman, the problems confronting our steel industry. This is not a debate on the Common Market, but the Common Market is casting long shadows over the British Steel Corporation, and I am bound to say that the Government have been less than frank with the House on its effects upon the steel industry.

My position, and that of many of my hon. Friends who represent steel constituencies, is that we represent divisions in which the steel industry plays an enormously important rôle, not only in the economy of our constituencies, but in the economies of considerable areas around our constituencies, and affects many industries. The Consett Steel Works in my constituency employs between 6,500 and 7,000 people. The very existence of those works is vital to the economy of a large area of North-East England.

When the industry was nationalised, the old Iron and Steel Federation produced the Benson Report, to which the Secretary of State referred in rather more than glowing terms. That report was produced as a so-called alternative to nationalisation. It envisaged the phasing out and closing down of the Consett Steel Works, with all the effects that that would have had, not only upon the constituency, but upon a large area round about. There is no doubt that the steel works were saved by being taken into public ownership, and today, five years later, we have there one of the most modern and viable steel plants in Europe. The hon. Member for the New Forest spoke about investment, and I take up the point made by him because, notwithstanding the modern and vital nature of that plant in my constituency it still needs, not uncertainty, but further investment. If the Government have any plans to break up the steel industry in pursuit of entry of the Common Market or any other doctrinaire objective, they will face the implacable opposition not only of my constituents but of all my right hon. and hon. Friends.

7.10 p.m.

Mr. Churchill (Stretford)

It is strange to hear hon. Members opposite complaining of too much Government interest and involvement in steel when their party made this a Government responsibility by nationalising it. I wholeheartedly support the review of the industry which the Government are undertaking, so that this vital and basic industry can be rationalised, modernised and—I am sure hon. Members on all sides would agree—substantially expanded to meet strong overseas competition.

The hon. Member for Consett (Mr. David Watkins) said that the Common Market was casting a long shadow over the future of the British Steel Corporation. I cannot accept this, because to be part of a free trade area with a home market of 270 million people, as the enlarged Community will be, will give efficient steel production in this country colossal opportunities.

The hon. Member for Ebbw Vale (Mr. Michael Foot) attacked the Government for cutting the steel price increase in half. I cannot follow him in that, because Trafford Park in my constituency—where 40,000 people go to work every day—has a great preponderance of heavy engineering and heavy industry, and steel is a basic primary material. The 14 per cent. increase on top of several swingeing increases in the price of steel that have taken place since nationalisation would have very seriously affected the overseas competitiveness of many of the products there and have made the employment situation even worse.

My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) mentioned the burden of nationalisation on steel in Sheffield. Lancashire Steel would not be in its present situation, and 4,500 people would not be facing redun- dancies, but for nationalisation. Lancashire Steel would have had to continue its steel making plant as well as the wire works, but the B.S.C. has no interest in continuing steel production at Irlam. This is why B.S.C. is throwing 4,500 people out of work.

Mr. Eddie Griffiths

The hon. Gentleman cannot categorically say that there would be steel making at Irlam today but for nationalisation. My guess, which is more informed on steel than his, is that Irlam would have been closed before now.

Mr. Churchill

I cannot accept that. An independent company like Lancashire Steel would not have wished to depend on other plants or the Japanese while it could still profitably produce steel at Irlam. This could still be done, if the open-hearth furnaces were replaced, with a fairly modest investment programme.

I must declare an interest, because 750 of my constituents in Stretford and Urmston are among the 4,500 threatened in the Irlam closure. About 1,900 are threatened with redundancy this year, although no final details have been announced. This uncertainty is causing a good deal of anxiety among my constituents. There is at least the prospect of a bid by private enterprise which not only would continue the re-rolling at Irlam and the wire making at Warrington but would not wish to be dependent on the monopolistic control of the B.S.C. for its supplies, and so would carry on an independent steel-making capacity. This would go far to mitigate the 4,500 threatened redundancies.

But there is a difficulty which I hope the Government will recognise, in that this interest which has been expressed from private quarters has met a very frosty response from the Steel Corporation, which, one can understand, has, as a monopoly, no interest in seeing anyone set up business in competition with it. I understand that it has been unwilling to supply the figures of production and profitability which any responsible bidder would need to enable him to bid for the whole of the works.

I believe that the Government will accept that they have a certain wider interest in this matter than the Steel Corporation itself, since the Irlam Steel Works is such a major local employer. It provides about 60 per cent. of the employment of the people of the village of Irlam and extends fairly wide into mine and neighbouring constituencies. What do the Government intend to do about this? It has been suggested that the B.S.C., through its associate, John Finlan Limited, will set up new industries in Trafford Park and Irlam and this will mitigate the effects of some of the redundancies. But this will inevitably take two, three or even four years to establish: it is no good to men being thrown out of work this year.

I am grateful that the Government have said that they will look with renewed favour on the area when granting industrial development certificates, but this is not enough. The Irlam Action Committee, which includes the local unions, the local authority and other interested bodies, has made it clear that it does not care who carries on steel making in Irlam, provided the jobs are saved.

Will the Government lean on the Corporation and tell it to supply figures on which a private enterprise bid could be based? If such a bid is then forthcoming and is realistic, I hope that the Government, in order to safeguard the jobs of so many hundreds of men and their families, will require the Corporation to give up the two relatively small—in terms of employment—but highly profitable parts, the bar mill at Irlam and the wire works at Warrington, which the Steel Corporation wishes to retain.

On the wider question of the future development of the steel industry we have had many suggestions for the siting of plants, and, naturally, every hon. Member is rooting for his constituency. There seems to be an assumption that a coastal site is the only way of producing steel economically. There has been a great deal of talk about this, but there seems to have been little investigation of the cost of an inland site in what are the traditional heavy industrial areas of the country. If we are to close down inland steel-making plants—and Irlam is but one of several in the greater Manchester area—and opt for coastal sites, we must consider the effect of this on the established industrial centres where heavy engineering and other heavy industries have in the past been close to their steel.

In the long term many of these industries would undoubtedly wish to be near their primary raw material, and this could disastrously accelerate the decline of traditional industrial areas. I ask my hon. Friend to consider the possibility of a deep-water ore terminal off Liverpool which could take the largest of the present day ore carriers and perhaps a pelletising plant as well, on site, and the practicability of transport by heavy duty railway or a modern system of barge-trains up the Manchester Ship Canal to an inland site. That site need not necessarily be Irlam—it probably is not big enough—but it could be somewhere in the greater Manchester area.

I would like to put some figures in my right hon. Friend's mind when considering this, British enterprise is heavily involved at the other end of steel production; namely, getting the ore out of Australia One British company has built a 180-mile railway from Mount Tom Price in North-West Australia to Port Headland. The ore is transported in 100-ton railway trucks, 180 at a time making a total of 18,000 tons per train. The cost of this is one third of an old penny per ton mile.

Mr. Skeet

Would my hon. Friend not agree that instead of having the pelletising plant on Merseyside, it would be much cheaper to build the pelletising plant in Australia?

Mr. Churchill

There are already such plants in Australia, but we do not want to be totally dependent on our good friends there when we are facing such competition for their materials from the Japanese. If we are to be free to choose our source of raw material from Africa, Latin-America and other places, it might be convenient, and a source of employment, to have a pelletising plant in this country. Now that we have a supply of North Sea gas, the problems involved with an inland site are greatly reduced. I would ask my right hon. Friend to give serious consideration to the implications for the future development of heavy industry in this country which would result from a commitment to coastal sites alone.

7.23 p.m.

Mr. Peter Hardy (Rother Valley)

I can understand the hon. Member for Stretford (Mr. Churchill) making reference to the need for a consideration of inland sites but I cannot understand hon. Members opposite who refer to our disapproval of the Secretary of State's review. If the Secretary of State had decided last autumn that there should be a balanced review of the steel industry and its problems perhaps we should have been suspicious rather than critical. There would probably have been grounds for suspicion. I am sure that many people in my constituency and in the steel industry share the view that the Secretary of State is engaged not so much upon a balanced appraisal of the steel industry as a panic reaction to the very sharp downturn in trade which occurred not long ago.

I will not follow what was said by the hon. Member for Stretford any further, because I was rather touched by a comment made by the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn), who I regret to say is not here now. He said that he regretted that this debate was taking place at all. Sheffield, Hallam is quite close to my constituency and I do not regret that this debate is taking place. It is right when there is profound anxiety in our constituencies, when there is growing unemployment, that this House should hold debates on relevant subjects. Having heard the hon. Member for Hallam express such regret, I feel that the majority which he secured over me at the 1966 General Election ought to have been even more greatly reduced than it was.

The Secretary of State said that he wanted to see the steel industry put back to the top of the world league. I have been scratching my head trying to find out when we were top of the world league. We were certainly not top of that league in the last 10 years before the steel industry was renationalised. In the last 10 or 12 years when the industry was in private hands Britain's share of world steel markets dropped by one-third, from 12 per cent. to 8 per cent. If we are to reach the top of the world league we certainly cannot afford to talk about, think about, or play with ideas of hiving-off.

I prefer the comment of the Secretary of State in the debate on 18th March when he gave a pretty fair analysis of the problems facing British Steel Corporation's management at the time of re-nationalisation. He said that the industry was not planned and integrated, that it was developed from a series of disparate decisions, later aggregated, and that the chief task of the British Steel Corporation was to create order out of that disparity. It had to integrate and prepare the industry for a sound future.

It has obviously done a great deal in these directions, apart from establishing a good pattern of labour relations which I regard as extremely proper in view of the responsible and serious nature of the industry's labour force. It also engaged in a considerable appraisal of new industrial investment. This is the greatest need, because if we are to get high in the league table we must have investment. When we began to experience the short-term pressures of a slight recession in industry at the beginning of the year the Government's reaction was to panic and to apply political tactics because, faster than the downturn, came the leap of the hiving-off gang who have done a great deal to create the anxiety which is one of the most serious problems in our society.

Obviously the question of the pricing condition and costing of British steel was serious, but the Government's reaction was fundamentally wrong because not only did they stop investment at a time of inflation, which seems to be undesirable, but they brought to the steel industry a great anxiety. In the long term this can have dangerous consequences. I can understand the Government wishing to control prices, attempting to seek popularity. This is understandable in view of their fractured vows of last year. If price restraint was part of the general policy I could understand and to some extent support it. Unfortunately, this is a very lonely restraint; it is more a case of shifting the burden to the public sector than giving assistance to the consumer.

If the Government were serious about restricting prices in these ways perhaps we would have seen the West Riding County Council, which introduced a record rate increase, being told to collect only half of that increase in respect of the British Steel Corporation's hereditaments in my constituency. That did not happen. The Corporation often has to shop in the same market as everyone else. The increases which it proposed would not have made the industry any less competitive. They seem to have been very realistic.

The price of steel plate, for example, rose by 10½ per cent. to £69.55 per ton. The Government murmured words about maintaining competitive capacity when this price increase was announced. Yet the price of steel plate in West Germany is £86.35 per ton. The price of steel plate in France is £84.30 per ton—or it was when the British Steel Corporation announced the recent price increase. If the right hon. Gentleman had allowed the Corporation to charge the higher price that it wished, the Corporation would not have been in the same difficulty today and British industry would still have enjoyed a very competitive position in respect of the products of our steel industry which it has to purchase.

Perhaps the Government failed to see that if they want the British steel industry to pay for or contribute towards its own investment, then it must charge a reasonable price. The Government may have been reluctant to see us breathe down the necks of our continental competitors who charge a higher price, or they may have been prepared to see the British Steel Corporation struggle while the private sector enjoyed steel products at a lower price than that which their competitors in Europe have to pay. It may be that some hon. Members will say that I have selected the example of plate steel deliberately and that it is an isolated example. There may be steel products which are not so competitive. But every one that I have seen is reasonably competitive, at least with the steel products of other countries. For example, the price of our cold-reduced coil, which I understand is used considerably in the motor car industry, is £73.50 per ton. In West Germany, at the time our price increase was announced, the price was £73.30, in France it was £75.70, and in the United States it was £88.50.

I do not know about the American situation but I am told that the price of European cold-reduced coil has been increased or is about to be increased, so our steel of that particular kind remains competitive, as does another very important product, re-rolled billets, where the price of the United Kingdom product is £47.10 and for the West German product it is £49.90—and this is likely to increase.

Some months ago the Secretary of State and his colleagues may have been delighted at the idea of restricting increases in the price of steel to assist private industry, especially the motor car industry. That may not have been the act of a very efficient business man, but it would have been a reasonable assumption of the Government two or three months ago. Attitudes have changed since then. Indeed, we want now to be offensive to the motor industry and not to help it. Perhaps that is because the industry has not been quite as co-operative as the right hon. Gentleman would have liked. It has given very high wage increases and has enjoyed cheap steel. Its workers receive high wage increases whilst the workers of the British Steel Corporation have to put up with very much lower wages. We are subsidising the private sector at a very unjust cost placed upon the steel workers and the public sector generally.

All this would not have been so bad if we had been able to get on with the investments we need. We have to accept that if we are to get anywhere in the world's league tables we have to increase investment considerably to enable the Steel Corporation to reach the target of 40 million tons plus by the end of the decade. This can be done only by massive investment. Conservative Members of Parliament and their supporters may shudder at the size of the investment programme, but if this so basic industry is to get anywhere this programme has to go ahead. If it is to go ahead, we have to accept that there will be a reduction in the labour force of one-fifth as a result of new plants, and if we want the steel areas to co-operate in that reduction we ought not to lay upon them the burden of the severe anxiety which they are experiencing today.

In my area we fully understand what this means, because a great deal of change in the industry has already taken place. Our people know that it means that a very large number of jobs will be lost and many people will be affected by change. More people will change jobs than will become redundant. They are accustomed and prepared for this. The management and unions in my area are capable of handling the problem. But it becomes more difficult if there is the present uncertainty.

Our local newspapers have always taken a properly independent line in politics and they are a very good barometer at present. Week after week we are now finding reports and comments which are extremely alarming. Only this week the Rotherham Advertiser, in a special leader on the front page, pleaded with the Government and with the British Steel Corporation to end the uncertainty which was casting a considerable blight on the lives of thousands of men, women and children in South Yorkshire.

This uncertainty is extremely harmful. It is dangerous because it will destroy the good relationships and the responsible attitude which the steel industry has enjoyed in my area throughout modern history. This is an example of the Government behaving in a clumsy and panic-ridden way. I plead with the Government to take a more cautious and wholesome line and, perhaps, less panic-ridden, by allowing the investment we need. If the Government do this our people will be prepared to accept the redundancies and the contraction because then they will see the new developments which South Yorkshire needs.

7.37 p.m.

Mr. Ronald Bray (Rossendale)

In deference to your wish, Mr. Speaker, I shall be brief in my intervention.

Earlier my right hon. Friend the Secretary of State for Trade and Industry refreshed the House's memory on the Government's policy for the steel industry. We learnt again that the bulk producing plants will remain within the central public sector and that the other units, which were smaller, and, perhaps, the processing units, would be considered for purchase by private investment.

I welcome this action because it will release funds which would otherwise have to be provided from the Treasury for development of the central and larger bulk producing steel plants. My right hon. Friend the Secretary of State also said that relationships with the Corporation were essentially good. I should like to know whether my right hon. Friend will receive full co-operation from the Corporation regarding the disposal of certain of its redundant plants where sale to private industry or, alternatively, scrapping is to be considered. I have in mind the position where there may be ample capacity, let us say, on the East of England for a certain product within the scope of the Corporation but where in the West we shall have an older and perhaps less efficient plant which has been making an identical product over the years. Will there not be extremely serious resistance to the older plant being offered to a third party? I envisage that occurring. The Corporation will logically pre-empt for that plant to be demolished rather than offered on the open market.

My hon. Friend the Member for Stretford (Mr. Churchill) cited the case of Irlam, a typical case in point. Does the Steel Corporation propose to offer its plants openly and equitably, or will it hold back any plants which may, under private enterprise, prove to be strongly competitive?

Looking into the question of private capital further, I think that the source of capital is irrelevant. It may be foreign investment. The hon. Member for Ebbw Vale (Mr. Michael Foot) said that foreign investment would not be attracted to the steel industry. The more capital we can attract from private investment the less the strain on central Government finance. For that reason, I commend an international stake, provided that it is an acceptable one, in the British steel industry.

Next, redundancies. I have had a good deal of experience with the steel industry. I go a long way with the remarks made by the hon. Member for Cleveland (Mr. Tinn) about the steelworker being loyal, hard-working, and very keen on the product of his industry. I regret to see such people getting an unfair deal. Although it is said that the Corporation has projected an investment of £7 million on industrial estates, I am not satisfied that that is anywhere sufficient. Only 4,000 new jobs are projected or are in the pipeline. I ask the Minister to give this matter his most serious attention, bearing in mind the needs of certain inland areas.

The pattern as laid down by the Government will relate the pressure on capital and make the industry appreciably more discerning in the matter of customers' needs, rather than allowing the customer to take the "nth" place down the line as appears to be the case at present with the motor industry. I understand that when the motor industry is in full production it will be almost essential for it to purchase some of its deep drawing steel for pressings and the like from overseas, possibly from Japan, a country which itself is now feeling the pressure on its capital resources for the steel industry and whose steel industry is not working at full capacity.

When the vote is taken later I ask that all support be given to the Government's long-term programme for the industry.

7.43 p.m.

Mr. Eddie Griffiths (Sheffield, Brightside)

In our last debate on the steel industry those in whose constituencies redundancies were occurring sought to catch your eye, Mr. Speaker, and those who succeeded got their points home. I hope that I shall not mention Sheffield more than twice in my speech tonight.

I am sorry that the hon. Member for Stretford (Mr. Churchill) is not in his place. The hon. Gentleman popped in, made his Irlam speech, and popped out again. That is a tribute to the hon. Gentleman's deep interest in our great steel industry. The great problem facing the Government and the Corporation alike is the pattern for the future. We are all in favour of rationalisation until we have to be rationalised. Then we start kicking over the traces and making representations here, there and everywhere. I have noticed an increasing interest in Irlam in terms of looking towards private enterprise for salvation. I personally do not believe that such salvation is at hand.

On Second Reading of the Iron and Steel Bill in 1969 the right hon. Member for Leeds, North-East (Sir K. Joseph) said this: What a bitter paradox it is that, but for nationalisation, many of the changes necessary in British steel would already have occurred spontaneously. I will tell hon. Members how they would have occurred. Some of the private companies would have flourished, some would have faltered and some might have gone REPORT. 8th May, 1969; Vol. 783, c. 698.] enterprise system should work."—[OFFICIAL REPORT, 8th May, 1969; Vol. 783, C. 698.] Anyone looking to private enterprise for salvation would do well to study those words.

I want to consider the industry's past, its present, and its future and put some questions to the Minister in an effort to get some further clarification of statements made by the Secretary of State today and previously. One of the stories of the industry's past can be summarised quickly by these words—too little investment, too little capacity, in particular capacity at the wrong time, and badly balanced plants.

Today we have heard of the outstanding examples of Llanwern and Ravenscraig where, because of political intervention, the Government of the day decided to split the two plants. The plants are separated by a considerable distance, each with small melting capacity and a large finishing capacity. This was a great financial liability for the Corporation when the plants were taken over. My hon. Friend the Member for Motherwell (Mr. Lawson) said that capital investment was required at Ravenscraig to bring the melting capacity up to match the finishing capacity. This in essence is what will happen at Llanwern, which the Secretary of State for Wales announced and not the Secretary of State for Trade and Industry.

One of the few political points I want to make is that on nationalisation we made a big mistake. I believe that the compensation was far too generous, because, to put it crudely, we took over quite a few clapped-out plants. The Corporation's invidious job has been to examine these plants and to recognise that they would have to be closed once the boom was over.

Nationalisation brought 14 companies together. That was a major job. There have been two reorganisations starting with regional organisations. This was superseded by the product division. One of the problems that has plagued the Corporation in the two years from the back end of 1968 to the back end of 1970 was that although there were boom conditions in Britain—a great demand for steel products at home and a great demand internationally for steel products—we did not have the working capacity to meet the demand. We had to go round the world shopping for steel ingots and slabs. In the Rotherham area the embarrassing situation was that although the order books were full production had to be reduced because not enough scrap could be found to keep the electric arc furnace going.

During this period the Corporation has been plagued by the price problem. I do not often criticise my own Government, but on this point I lay strong criticism at the feet of my Government. When the Corporation said, "We want a price increase. Trade is good. Our prices are too low. We can get the price we are asking for", the Government sat on the request for months. The Corporation got too little too late. It has been estimated that, in the two years to October, 1970, the Corporation, it it had had the price rises it wanted at the time when it asked for them, could have earned another £200 million, which would not have brought it into the red as it is now.

I come now to the present state of affairs. When the Government came into power, we were told by the propagandists that they were a Government prepared to meet the challenge in every facet of industrial, commercial and social life, and that their plans were ready. They have been in power now for nearly a year, and all we have had, in effect, apart from the past week or so, have been vague indications of their intentions for the industry.

I feel most upset at the events of the past eight weeks. The right hon. Gentleman has admitted, both at a private meeting and in the House today, that the British Steel Corporation was more or less put in the hands of the Government's receiver in the sense that, every time it wanted to spend money, every time it wanted to develop, make capital investments or raise prices, it had to come cap in hand to the Government. I find this very disturbing, especially in the light of the attitude of right hon. and hon. Members opposite when they were in opposition. I quote from the Third Reading debate on the Iron and Steel Bill in 1969, just under two years ago: I strongly approve of their desire to become fully commercial. But, sadly, as hon. Members opposite so often reminded us, the Act of nationalisation is passed and steel has fallen victim to Socialist dogma. Having Ministers and their civil servants constantly breathing down the back of their necks must be infuriating and time-consuming for the Corporation's managers".—[OFFICIAL REPORT, 11th July, 1969; Vol. 786, c. 1737.] Those words were not mine, though I should accuse the present Government of doing precisely that now. They came from the hon. Gentleman the Member for Bournemouth, West (Sir J. Eden), who sits alongside the Secretary of State and. I assume, advises him on steel matters.

There were many other hon. Members—I could easily quote another four now—who, when in opposition, criticised the then Labour Government for interfering in a nationalised industry. The present Secretary of State and his Department have not stopped at interfering. In setting up the steering committee, a committee to look into the affairs of the Corporation, they have gone much further. Let us consider the people on the steering committee who are carrying out the short-term review. I am told that there is someone from the Ministry, there is Lord Melchett from the Corporation, someone from the Treasury, and a consultant. May we be told a little more about the consultant? I should be interested to know his or her background. Does he come, perhaps, from Guest, Keen and Nettlefold—or would that be to make too much of a political point? I should be interested to know who the consultant is and what part he is playing in the recommendations to the Secretary of State.

The Corporation moves into this year facing a potential loss of about £50 million because commercial freedom has been taken from it. It is not allowed to charge the prices which it feels commercially it could get away with in the industry. It has no other means of raising money. I should like to hear the right hon. Gentleman develop a little further how he proposes to get the Corporation out of the read in the coming year.

Now, the problem of closures. Unfortunately, because of Government policy generally in the country and the stagnating economy, the redundancies are occurring at a time when we have about 800,000 unemployed and job opportunities are very slim. The redundancies are occurring in areas where there is unemployment of 4 per cent. to 5 per cent. already, and the chances of these workers finding another job are fairly remote.

Looking to the future, I hope that the right hon. Gentleman will state clearly that he will give back to the Corporation the authority which, I believe, the Act of nationalisation vested in it. As I understand it, a nationalised industry is subject to Ministerial control applied directly by the Minister and not by a steering committee appointed by him, and it is also accountable to Parliament. We are witnessing a new departure now from the two established principles. The idea seems to be, "If you get a bit in the red, or if we want to sort you out, we shall set a steering committee on you, scrutinise you from top to bottom, and see exactly where you are going and what you are doing". I hope, therefore, that we shall hear this evening that the Corporation is to be given back its freedom.

When will the Corporation have the right to make its own commercial judgments on prices, on the size of the industry as it sees it, and on the development of markets? Although the right hon. Gentleman suggested that the question of the size of the industry came in his long-term review, I suggest that it should be seen as the responsibility of the Corporation, not of the Government of the day.

If the right hon. Gentleman and his Government are not prepared to give the Corporation commercial freedom, they must accept the alternative, namely, that they are responsible for the capital investment required to put the industry in a competitive stance.

I come now to two or three questions on the Secretary of State's statements both today and a month back. He said that the integrated bulk steel-making plants would remain in public hands. Where those integrated units have sophisticated processes at the end of their plants, will those processes remain part of the set-up and remain in public hands?

Semond, does the right hon. Gentleman envisage bringing private capital into bulk steel making, either on its own or in partnership with the Corporation? Also, when he refers to consideration of a green field site, does he intend that this would be part of the Corporation's plans or that any plan which the Corporation had would be in competition with investment which might come from the private sector in this connection?

When the right hon. Gentleman says that bulk steel making is to remain in public hands, does he mean for all time, or does he mean that at any given time, assuming that there is a Conservative Government, that Government can be free to bring in private capital if and when they can attract such moneys?

Now, the question of special steels and other sections of the industry. Am I to understand from what we learned from the right hon. Gentleman at a private meeting which he had with several of us from this side that he does not envisage it as part of Government policy that a "For Sale" notice will go up on every plant in the special steels division, the tubes division, the engineering division and the chemicals division? Does he, rather, see that the Chairman of the Corporation will be invited to have discussions with the private sector, or a potential buyer, and that if the commercial deal is satisfactory and to the advantage of the Corporation—on the basis of a willing seller and a willing buyer—he will be quite happy if they have discussions?

Will the right hon. Gentleman also look at the position of Brown Bayley's? This firm appears to be rather a rogue elephant. We have the public sector owned by the Corporation and the private sector held by private shareholders. But we also have the firm of Brown Bayley's in Sheffield which was taken over by the Industrial Reorganisation Corporation. After the demise of the I.R.C. the Government took its shares over and now own a substantial part of the firm. Right hon. Members have been talking about duplication in management at the top. The obvious and logical thing for the Government to do is to pass Brown Bayley's into the Corporation, and not duplicate senior and higher management.

A number of my hon. Friends have mentioned the position of steel workers. I was a steel worker for 16 happy years. One of the reasons why I came to the House was that I thought that I could serve the steel industry better as a politician than as an industrial chemist. I am probably as much in contact with steel workers as any hon. Member. I feel that the morale generally is low, because of uncertainty about the future and about the Government's attitude, because the Government have not made clear what the future size of the industry is to be. The workers feel that there is little security in the industry. Many of the private firms used to build up the aura of a family concern. I believe that the Corporation has built up that feeling within the Corporation in a short time.

I was at a dinner some time ago when the general secretary of the main union, the union to which I belong, the Iron and Steel Trades Confederation, told Lord Melchett, who was the guest of honour, that he would not have to look over his shoulder at what was happening behind him, that the steel workers within the Corporation were right behind Lord Melchett in the stand he has taken over the Corporation's position. I believe that that stand will succeed in the end. I was present at an executive meeting of the Confederation, which passed a unanimous resolution, covering steel workers throughout the industry, that any move to hive off profitable bits of the industry will be fought with all the determination and strength within the power of that organisation. Its power is not wielded recklessly. It has a reputation second to none for industrial relations. But when the livelihood of steel workers and their families is threatened, when the future is made insecure through the political meanderings of a Conservative Government who have lost the confidence of the country, I believe that it will fight and fight to the end.

Mr. Deputy Speaker (Miss Harvie Anderson)

I must remind the House that long speeches inevitably mean that some hon. Members will be cut out of the debate.

8.4 p.m.

Mr. Hamish Gray (Ross and Cromarty)

I, unlike the hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths) do not have a direct constituency interest in steel. But much has been said this afternoon about green fields and deep water, and I would point out that in my constituency, in the north of Scotland, I have more and bigger green fields and deeper water than anything mentioned today.

It is important that the steel industry should be made aware that many hon. Members do not have a direct constituency relationship with the industry but are extremely anxious about the industry, and look forward to the day when it will prosper as we all believe it should. I realise that it has a vital rôle to play in the economic future of this country and that there is need for expansion of the resources within the industry and for improved performance at many levels within it.

I welcome the review, because we are talking about big money, big investment. It would be unwise for any Government to contemplate investment of such magnitude without making absolutely certain that the basis on which that investment was to be placed was sound. I welcome the fact that my right hon. Friend has seen fit to carry out such an expensive and exhaustive review. I am also glad that we have an opportunity to debate this subject before any statement is made in the House, because I am sure that this afternoon some misplaced beliefs will be put right. I hope that when my hon. Friend the Minister winds up he will be able to allay the fears expressed in certain quarters.

The amount of investment which takes place in the steel industry over the next 10 years will be absolutely vital. If we are to remain in the world market, money must be ploughed into the industry. Many people believe that if we are to remain in the steel business at all considerable investment is essential. We have taken a decision, and it has been announced that the bulk iron and steel work will still be carried out within the B.S.C. Now that we have taken that decision it is even more important that we show good will and willingness to invest at a very early stage. Japan invested more in the one year 1969 in her steel industry than we in this country did in the five preceding years, and both Germany and France outstripped us in investment over a similar period. Therefore, we must look seriously at our future policy. Admittedly, between 1964 and 1967 the threat of nationalisation was hanging over the industry, and this could well have deprived it of certain potential investment.

If we look at our investment expenditure related to our crude steel production, we see that the performance is even more disturbing. Our ratio was lower than that of any of our 12 leading competitors over the same period. This trend must be changed.

Private investment in steel would naturally be welcomed. In return for investment, whether Government or private, the whole industry must take a long hard look at itself and at its structure. I believe that there are portions of the industry which could be hived off—and here I disagree with the hon. Member for Sheffield, Brightside—without any great realignment being necessary within the industry generally. But I caution the Government not to fall into the trap that the Labour Party so often fell into when it was in Government, that of being doctrinaire. There is nothing doctrinaire about any of the moves we have made so far, and there is certainly nothing doctrinaire about the review which my right hon. Friend has decided to have carried out. But we must be careful not to be tempted to hive off if to do so could lead to disruption of planned growth within the industry.

The Government must accept that investment in the industry should be of a long-term nature. There will be no quick appreciation of capital investment, nor will sufficient capital be obtained from hiving off subsidiaries. That can help, but vast capital will be necessary if we are to develop the industry so that it is world competitive. If hiving off of any of the subsidiaries must take place, it should take place fairly quickly because the people working in the industry will want to know where they stand. For too long the industry has virtually been a ping-pong ball in a match between nationalisationists and liberationists, and a period of stability is now essential.

Certain situations occurred when the Labour Party was in power. For instance, in 1968–69 a reduction of 12,000 job opportunities was announced. It is therefore hypocritical of the Opposition to suggest that the Government are unnecessarily creating unemployment by bringing about the rationalisation which has to take place. In January, 1970, the Corporation announced an expected loss of 40,000 jobs by 1975. A similar situation has arisen in other industries, and it has taken a considerable time to rectify.

The industry must consider whether its management structure is an effective as it could be. It must analyse the work being done and those who are doing it. It must make absolutely sure that, unlike many other nationalised industries, it has not created within itself an unnecessary layer of semi-management staff.

Recently a friend of mine closely connected with the industry visited an American tube mill. His appointment was made with the vice-president of the company at starting time in the morning. When he arrived he was accompanied by the vice-president who was in a boiler suit; he was close to the men working for him, and his relationship with them was excellent. I am not suggesting that relationships in our steel industry are not good, but, as in a great many other industries, management must take a close look at itself as well as those employed by it.

The unions can help. They have a proud record of co-operation in this industry. This should continue, because only by co-operation can the necessary increase in production be achieved which will help to make the whole project competitive. The unions can no longer stand aloof from the problems facing management. There is a genuine will in the industry to co-operate, and this must be given every encouragement.

The steel industry is virtually fighting for survival. The livelihood of many depends on it—for example, the small sub-contractors supplying the industry, who perhaps are not large enough to diversify in the event of the orders from the Corporation diminishing. These people must be taken into consideration, and a planned system of ordering in the Corporation must be encouraged.

I need say very little about the steel industry in Scotland because it has very good spokesmen in the House with constituency interests. However, I sincerely hope that the Government will look very closely at Scotland's claims for any future steel development. The facilities, labour and reputation are there, and I hope that the investment will be forthcoming.

My contribution to the debate has necessarily been brief. However, I hope that my observations will be carefully considered by the Government, together with those of many other interested parties.

8.15 p.m.

Mr. Alex Eadie (Midlothian)

The trend of this debate has confirmed the suspicion which I had when I took a deputation to meet the Secretary of State not long ago. Parliament is based on debate, and what concerns me is the little influence that we shall have in determining the policy which is followed. The right hon. Gentleman said that his steering committee of civil servants is examining the industry. We shall have very little influence on policy because there is no Minister on the committee. That is regrettable, particularly when we remember that the Conservative Party, when elected, said that we would have open government and that the Government would consult the people. Yet the right hon. Gentleman has confessed today that a bunch of civil servants will predetermine the industry's future and that Parliament's say will be of little significance.

I was more than concerned when the Minister told us that in the second phase of the steering committee, which would consider the long-term investment of the industry and project the industry's rôle, the question of coking coal would be discussed. I hope that the right hon. Gentleman will not be advised by the same civil servants who advised the Labour Government on the fuel policy which should be pursued in relation to the demand for coal and coking coal. It is well known that the 1967 White Paper dealing with the future demand for coal, including coking coal, is looked upon as a farce in mining and energy circles. I hope that the Minister will be forthcoming and will tell us the people who will project the future of coking coal and demand in the steel industry.

My hon. Friend the Member for Motherwell (Mr. Lawson) has mentioned the question of Ravenscraig at Question Time and in debate in the House. The Secretary of State confessed that he had interfered in the workings of the British Steel Corporation in relation to Ravenscraig. Because of this, there has been delay. Therefore, the Minister must be specific and tell us why, in logic, he confesses that he has interfered with the Corporation in relation to its capital expenditure and then says that the Corporation is responsible for the delay concerning Ravenscraig.

The question of Ravenscraig is of great moment to Scotland. There are 25,000 steel workers in Scotland, and the unemployment rate there is a scandal—over 120,000. We have the highest unemployment rate among young people under the age of 18 in Great Britain. We therefore need not be surprised that the steel workers in Scotland are wondering what the Government are playing at because of the uncertainty that their policy has created.

We are entitled to ask what is the Government's steel policy? Is there delay in relation to the steering committee because of the Common Market, for example? Are the Common Market negotiations tangled up with the hesitancy in allowing the Corporation to determine the industry's future? It might have surprised hon. Members when they read last weekend that when the Government first went into the negotiations it was said that there would be a transitional period of one year in relation to the European Coal and Steel Community.

I endeavoured by questions to the right hon. Gentleman who is carrying out the negotiations to find out why one year was decided for the transitional period in relation to the iron and steel industry. He was not able to tell me. I asked him: whom did he consult? Then we read in the papers only last weekend that the Government have decided in the negotiations that there will not be any transitional period. Do the Government wonder that the steel workers are anxious? They are anxious because of the uncertainty with which they are faced.

What is governing Government policy? Do they try to influence policy in relation to the capital investment which will be required to be spent on the steel industry? Are they looking at a situation where it will be easier and cheaper for us, once we are in the E.E.C., to import steel, rather than remain the major steel-producing country that we are at present? It is right that the right hon. Gentleman should be asked and that he should answer these questions because they are being asked by steel workers all over the country, and he has a responsibility to come clean on the issue of the Common Market and on why the Government decided to abandon the transitional period.

At the outset of my remarks I talked about Parliamentary accountability and about people and organisations being able to influence the policy of the Government and their steering committees. We are entitled to be told, for example, what the Government's view is of a submission which has been made by a body well known in Scotland—the right hon. Gentleman is aware of it—the Scottish Council (Development and Industry).

The Council made a submission to the Government on the British steel industry and its future in Scotland. In that submission, it gave a devastating analysis of British steel production, and it looked to the future. It showed annual totals of actual investment expenditure in steel since the mid 'sixties, and it included figures from Germany, Belgium, France, Italy and Japan, comparing them with those of the United Kingdom. In every item in that table we were well below in the league. There was an analysis of investment expenditure related to crude steel production, and figures were given from Belgium, the Netherlands, Italy, Austria, Spain, Sweden, Canada, Japan, the United States, Germany, France. Again, we were at the bottom of the league.

In that submission, and arising from those facts, the council said: One may conclude that unless this situation is changed in the years immediately ahead it will become increasingly difficult for the British industry to compete profitably with the new plants being constructed by overseas competitors. In the cross fire of the debate nationalisation has been used as an alibi for the problems of the steel industry, and some hon. Gentlemen opposite like to say that all the troubles and all the ills which at present confront the British Steel Corporation and the steel industry are because of nationalisation. I want to quote someone very authoritative in the steel industry, Mr. Arthur Bell, a divisional officer in Scotland of the Iron and Steel Trades Confederation.

Mr. Bell gave an effective answer to the allegations about nationalisation. He said of the present situation, and the future, that it is A time that could see the demise of steel making in Scotland within this decade. Not because the Scottish steel workers are strike happy, not because the Scottish steel worker has not the initiative, skill and ability to make steel or roll it into its various products, be it rods, billets or sections, as has his counterpart throughout the world, not because, as some people critically point out, that this is the result of nationalisation, or that, as some people in high places would have us believe, the Scottish steel worker is too highly paid and that his wage demands are pricing us out of the market. No. We must look somewhere else, and, just as in many other industries, the steel industry is reaping the reward of the lack of foresight by those who owned the industry for more than fifty years and who failed to invest enough of the economic wealth created by the steel worker. Returning to the submission by the Scottish Council, the Minister ought in this debate to reply to that part of the submission about Hunterston and the new steel complex, because in this submission the council argues that case, giving effective figures, and the people of Scotland are entitled to know what the Government's long-term policy now is.

I finish on this note. I was critical of my right hon. Friends when, in Government, they set up the big Ministry of Technology. I had great doubts whether such a big Ministry would be able to work efficiently, considering all the responsibilities it had. When the present Administration formed the Department of Trade and Industry I expressed anxiety again, because it has such wide-ranging responsibilities, and I felt that the issues of steel, of energy, of trade would be buried within that Department and that it would be administratively difficult for that Department to carry out these vast responsibilities, I do not want to be unkind to the Secretary of State, but I think it has got to be said: I believe that, because of the massive size of this Department, due time and attention are not given to the wide-ranging responsibilities which the Department has. I think the responsibilities are so numerous and great as to make the Department accident prone. Some of us on this side of the House who have had responsibilities in industry itself have sometimes had to tell workers that they were accident prone and to advise them to look for some other posts than those in which they were accident prone. I would say that the way the Department of Trade and Industry is handling the steel situation shows that the Department is inclined to be accident prone. A change is required in the administration so that the steel workers and the energy workers and trade can all get the kind of treatment to which they are entitled from the Mother of Parliaments.

8.27 p.m.

Mr. John Spence (Sheffield, Heeley)

At the risk of being caught in the cross fire of argument, I must refer to the opening speech of the hon. Member for Ebbw Vale (Mr. Michael Foot). Whilst no one could accuse him of being a shrinking violet or one who lives by the rule that an able man shows his spirit by gentle words, he showed, in spite of some muddled thinking, the direction in which the industry may be pointing and the direction in which he, like ourselves, would wish to see the industry point in the next few years. He said that he would like us to look at the future of the industry over the next 10 years, and I hope I shall be able to do so in a few brief remarks.

I was gratified that my right hon. Friend outlined the form of the study of the future of the steel industry, but I was surprised and somewhat dismayed that the nature and extent of the strategy over the next decade was not given in more precise terms. I propose to address myself to the other factors which my right hon. Friend should take into account when looking at the future structure and development of the steel industry, and which would be to the benefit both of the study and of the industry which we wish to serve.

For generations the steel industry has produced the universal material for our industrial advance. It has been one of the great engines of economic progress and development. By its very nature steel is a multi-purpose material, and rarely is steel the ideal material for the job for which it is used. This has been highlighted by the great developments in metals technology. The explosive expansion of world steel capacity has hidden from view the fact that steel has been overtaken by other materials in a great number of a specialist uses.

We all know that steel oil drums have been the monopoly of the steel industry ever since they were first invented, but now an alternative material, plastic impregnated paper, is used for oil drums. Another homely example is pre-stressed concrete, which has an ever-widening use. Even more important is glass-fibre and concrete used as a composite material, thereby considerably reducing the use of steel in the construction industry.

In the past 25 years steel, unfortunately, has become closer to being a marginal industry, and there is every appearance now that it has been overtaken in much the same way as the great foundation industries of the past—cotton, coal and the railways—have been overtaken by technical, scientific and technological advance. Steel has become marginal for two reasons.

The first reason is the challenge of the new materials industries to which I have referred. These involve not just a substitute material for steel but a completely new concept. There is a shift in concept from what industry provides to what man wants to accomplish, a shift from a general purpose compromise material to a specific product material. Man decides what he wants, and what he wants the material to perform, and the scientists and technologists duly produce this material. Although this is happening in other directions, the greatest economic impact of this shift is on the modern steel industry.

The second reason why steel has become marginal is that modern science has made steel a compromise material. Steel comes under pressure when a new material is developed which has the physical capacity to perform in excess of the compromise material. This is happening with great rapidity. No examination of the structure of the industry, no future investment and development policy, will be either responsible or worth considering if it ignores the challenged and changed position and prospects for steel as a commodity, when it is under pressure from new materials. It is irrelevant whether the responsibility for this lies with this Government or the previous one: any uncertainty in the steel industry over the next 10 years lies with neither Government but with the metallurgists, molecular scientists and chemists, with the men who have developed and are developing new specific purpose materials.

This is not to say that steel cannot have a new lease of life. Over the next 10 years, there might be an increase as well as a diminution in demand. But unless we are prepared to adopt new manufacturing processes it is doubtful whether we can make the industry as valuable as we should like, even in the short term. Even if we adopted the most advanced techniques we could not put steel back into its former position, or enable it to win back all its markets. But if we adopted the most modern production processes, we could arrest the decline.

The present uncertainty to which the Motion refers cannot be placed, as an economic and technical fact, at the door of my right hon. Friend. He should take as long as necessary on his deep study of the new materials and fit steel into a materials policy. That will be in the best interests of the nation and the industry and all who work in it. I hope and trust that the House will vote against the Motion.

8.40 p.m.

Mr. Roy Hughes (Newport)

I do not intend to follow the hon. Member for Sheffield, Heeley (Mr. Spence) into the realms of the marginality of steel as a product. Almost every speaker has agreed that the steel industry is a vitally important and basic one and, what is more, that it is a fair indicator of the health of the economy, though perhaps a better one is unemployment. There are approximately 800,000 unemployed at the moment, and the steel industry is not in a healthy state.

In the part of the world from which I come, these two factors are very much related. It is fair to say that, if it were not for the present relative boom in the mining industry, the employment situation in Wales would be catastrophic. As it happens, the steel industry employs some 80,000 people in the Principality, and this almost doubles the number employed in the mining industry. More than a quarter of the Steel Corporation's productive capacity is based in Wales, and much secondary employment is generated from it. Therefore the crisis in steel is the biggest threat to the employment and prosperity of people in Wales. Thousands of jobs are at risk.

I was interested to read an article in The Economist of 13th March which questioned the wisdom of a British steel industry at all. It argued in favour of importing great quantities of steel. However, in turn, that would mean that we were no longer masters of our fate. We have seen how we have been held up to ransom over oil in recent months. A similar situation could arise over steel. In that event, of course, what would have to be taken into consideration is the effect on the balance of payments. It would do tremendous damage to our economy, and I can hardly believe that such a proposal could be seriously discussed at high level.

To return to the immediate situation, we have the Steel Corporation's announcement of 20th April that 7,000 people were to be made redundant, and that there were to be a further 12,000 redundancies, bearing in mind that this might include a portion of the 7,000. However, from the point of view of Wales, it is inevitable that thousands of jobs will be lost. At present, morale in the Welsh steel industry is very low. The same applies to the country as a whole. Many workers are looking over their shoulders wondering whether it might be their turn next, especially when they see the sort of headlines that have appeared recently in the Western Mail. That on 20th April read: Britain's 814,000 jobless worst for 31 years. The heading of the editorial was in similar terms: Heading towards a million unemployed. That is the state to which this Government have brought our country in the matter of about 11 months. For South Wales, it is a case of being back to square one. But this is expected of a Conservative Government. The Conservative Party has always been associated with unemployment.

Industry and commerce rely essentially on confidence in order to function. What chance has the British Steel Corporation had? Immediately this Government came to power, there were rumours about hiving off special steels, the construction sections and the chemical and engineering sections. This uneasiness has gone on for 11 months, and the morale of the industry is very low.

It is true that we had better news in the announcement by the Secretary of State on 27th April that bulk steel making was to remain in the hands of the Corporation. However, this still leaves in balance the other sections to which I have referred. I have felt for some time that the Government are pursuing a vendetta against the British Steel Corporation because they resent public ownership and wish to sell off its profitable sections.

This is in line with the philosophy of the hon. Member for Bournemouth, West (Sir J. Eden), who will be winding up this debate. He believes that public enterprise should be allowed to do only what private enterprise cannot reasonably be expected to do. In other words, he wishes to leave the profitable part of the industry to the private concerns and to leave the loss-makers with the publicly-owned concerns. I would ask the hon. Gentleman to look at the Steel News of 22nd April, which pointed out: Critics of the Corporation's pricing policy need to bear in mind that in the last year of private ownership, the steel companies comprising the B.S.C. would have made an aggregate loss of £56 million on the Corporation's present accounting basis. Then there is all the hullabaloo about prices. It must be remembered that until a few months ago the steel industry had had three years of relative boom. It is fair to say that the Labour Government deliberately held back price increases. Had the industry been allowed to put up prices, its financial resources could have been built up. The Economist on 13th March said, in defence of Lord Melchett: … if he had been allowed to charge more during the steel boom of the past three years the B.S.C. could have netted a £200 million profit instead of heading for a deficit". Those are the real facts of the situation. We know that the application for a 14 per cent. increase has been reduced to 7 per cent. That application was necessary to pay for raw materials and to balance the books of the Corporation.

The Government show no consistency whatever in their attitude to price increases. I presume that most hon. Members drive motor cars, and we all know how many increases have taken place in the price of petrol in recent months. Are the Government saying that only private enterprise will be allowed to act commercially? If the B.S.C. prices are allowed to rise by the 14 per cent. which is asked for, then car makers and shipbuilders will still be paying lower prices than almost every other country in Europe. It is obviously beyond doubt that the B.S.C. needs capital for future investment. This is absolutely essential. During many years of private control of the industry investment was allowed to slip back.

I should like to end by being a little parochial and making a constituency point. One hundred yards or so outside the boundaries of my constituency is the great Spencer works which employs about 8,000 people. Although it is outside the town, it is the pivot of the economy of Newport. The announcement by the Secretary of State on 18th March postponing the large investment there of the £50 million cast a gloom over the whole area. This was alleviated later by a statement from the Secretary of State for Wales in the Welsh Grand Committee which said that the development, after all, would be allowed to go ahead. This is a logical extension of this great works and it should never have been held up. The original announcement created harm and despondency in the steel industry.

There are three other medium-sized firms, employing approximately 6,000 people, in my constituency. There have been redundancies, admittedly small, in two of those firms. One could speculate that this is the tip of the iceberg, but it adds to the already heavy unemployment in South Wales.

It is becoming clear that this is the first Government since the war to use unemployment as an instrument of economic policy. Mr. Peter Jay, the economics editor of The Times, on 20th April, said: A high level and a rising trend of unemployment are, it is emerging, an integral part of the Government's short-term economic plan rather than just a regretted side effect of past output trends. In addition to unemployment we have inflation. What do the Government do about it? They look for a scapegoat. The scapegoat they have found on this occasion is the trade union movement. It could be said that if there were no trade union movement, the Government would have to invent one.

Our economic life in post-war years might be called the Keynesian era. He taught that the level of employment was decided by the level of demand. Therefore, it could be argued that the claims of the trade unions are stimulating the economy and that, if it were not for these wage claims, the situation could be much worse.

There is certainly a great need to restore confidence in the economy and a start could be made in the steel industry. On 20th May the Times Business Supplement carried an article headed, Fair Play for the British Steel Corporation. This can best be done by the Government allowing the 14 per cent. increase for which the Corporation is asking. The Government should also state categorically that there is to be no hiving-off of the industry, and they should allow the investment programme to proceed. I should be surprised if the Government decided to do that. They seem intent on wrecking this great industry. All that they disagree about is the way that it should be done.

On 22nd April my local paper, the South Wales Argus, pointed out: Having helped to promote conditions in which the present steel industry cannot be viable, the Government will no doubt make great capital—literally and figuratively—of the need to de-nationalise, which means creaming-off the profitable bits to private ownership: surely the shabbiest bit of political trickery of modern times. I wholeheartedly agree with those sentiments.

8.54 p.m.

Mr. David Crouch (Canterbury)

The hon. Member for Newport (Mr. Roy Hughes) should not use such phrases as "the Government are trying to wreck the steel industry". He knows that that is not true. It is misleading and extremely foolish to make such an observation. I have great respect for the hon. Gentleman's sincerity and knowledge of his constituency and the industry, but that kind of misguided phrase does not help the debate.

The debate has produced good contributions from both sides; it has produced much better contributions than the last debate, when there was a higher generation of emotion, led, perhaps, by the hon. Member for Ebbw Vale (Mr. Michael Foot). However, I understand his emotion in the matter. I, too, have some emotion.

Concerning rising prices in, and the state of, the steel industry, last year the British Steel Corporation faced a situation of almost catastrophic dimensions. Rising costs of over £200 million hit it like an avalanche. For that reason it wanted to make massive increases in its prices. The Government were right to pause and say that they must consider the whole future of the industry against the background of our national problem and the economy of the world, particularly the economic and industrial problems facing the steel industry throughout the world today.

I feel that for too long steel has been political. We must get down to seeing it again as an industrial and commercial problem. We have to learn to live with this nationalised industry and, in order to return the necessary measure of confidence to the industry, the country and the economy generally, my right hon. Friend the Secretary of State has made it clear in the House that it is his intention not to weaken the industry but rather to strengthen it to enable it to go forward in the short term, in the middle term, and in the long term, and it is in the consideration of going forward that I wish to address the House tonight.

I ask the House to consider the problem of the run-down of the industry, and the run-down of the number of men employed. What seems to me strange is that this should have come as such a surprise to the House, to the public, to the industry, to the towns, and to the works in the towns where this rationalisation is taking place.

We have been accustomed to the rationalisation of our major industries since the war. We have seen the rationalisation and run-down, in order to' improve efficiency, of the coal industry, where about 30,000 men a year have found work in other industries after being retrained. Somehow we have been able to cope with a run-down in the coal industry of 30,000 men a year, sometimes rising to as much as 51,000 a year. That was too much. We are now talking of the run-down of manpower in the steel industry from 255,000 to 195,000, a total of 60,000 men, which is equal to two years of rationalisation in the coal industry. All I am saying is that it is strange that this should have come as such a surprise both to the Opposition and to the Government.

I ask my right hon. Friend for an assurance that enough concern has been shown about the problem by all the Departments concerned—the Department of Employment, the Department of the Environment and, of course, his own Department—and that plans have been prepared for the retraining and redeployment that will be necessary to cope with this sizeable problem. We are talking about redeployment in the steel industry, and I do not wish, in this House, to minimise the seriousness of what redeployment means to anyone faced with such a problem. Nor do I wish ever to appear detached from the severity and anxiety of such a situation. I should therefore like an assurance from the Government that they are satisfied that the energies, expenditure and activities of the Departments that I have mentioned are capable of coping with this problem in the towns that will be hit by such rationalisation.

Mr. Eddie Griffiths

I understand the hon. Gentleman's concern. In a normal employment situation the point that he is making would be valid, but what can the Government do when there are 800,000 unemployed, and areas such as Rotherham and Irlam already have high unemployment figures?

Mr. Crouch

I accept that there is nothing so difficult as rationalising an industry in an attempt to modernise it and enable it to match the competition that it has to face when rationalisation means putting men out of work temporarily while they are redeployed and retrained. This is a testing time for the Government, but they cannot afford to duck it and say that we should put off modernising such an important industry as this one. A return of confidence in this industry is vital—not only among management and men but in the country at large—a confidence that the industry is on the way forward again as the backbone of our industrial economy. We must give the whole country the clear message that we see a future for the industry.

Suggestions have been bandied about tonight that perhaps this industry is not so great, that it may suffer from competition and imports. It must be seen as still the backbone of our industrial expansion. I do not accept the view that we shall be blown about by the winds of competition and may even have to give in and receive steel from abroad. We should look ahead and show that we have a real plan for the development of the industry to cope with the future competition which we are beginning to hear more about all the time.

Part of the present Heritage Plan of the Corporation is to modernise and rationalise the industry up to 1980, to replace obsolete equipment. It is not a big expansion plan but a modern expansion plan. Will this Heritage plan be effective in meeting competition at the end of the '70's? How effective will the industry be?

What new structure is planned for the industry to enable us to compete with the Japanese? My hon. Friend the Member for the New Forest (Mr. Patrick McNair-Wilson) spoke interestingly but frighteningly about the future plans, present investment and actual production in Japan at its fully integrated coastal site. If we look ahead, it must be with confidence that we are not only modernising what we have but preparing for tomorrow and that kind of competition as well.

My hon. Friend said that the investment for such integrated sites might be as much as £3,000 million. These are very big figures which one can easily throw across the Chamber. Has the Minister such figures in his mind for the next 10 or 20 years? If so, how will he finance it? I believe that he can find this money, but I want him to be sure that there is a future for such investment and that he can find such finance. It may seem strange for a Conservative to say this, but the finance may have to come first from the Government.

This is a nationalised industry, and we have to make it successful. Let us see it run properly and effectively. I hope that there will not be too much interference. I was glad of my right hon. Friend's assurance that he did not intend to look over the shoulder of the Corporation too much. In this way he will give great encouragement to the restoration of confidence in management and men from top to bottom.

A first priority must be to produce in the next 10 years a modernised, viable and competitive industry. This is not an unprofitable industry. Let us think of investment with a view to producing a profitable industry, which is a laudable aim for any Government looking at a nationalised industry. This is how we should look to the British Steel Corporation of the future. We on this side of the House have a tradition for sometimes fighting shy of the nationalised industries. We must not fight shy of this industry; we must restore confidence in its future. If we do, we may well find that private investment will come into it willingly.

9.6 p.m.

Mr. John Smith (Lanarkshire, North)

I congratulate my hon. and right hon. Friends upon bringing forward this timely Motion demonstrating their deep concern over the future of this basic industry. I have a direct interest in the steel industry because of the situation within my constituency of the Gartcosh strip mill which is an integral part of the Ravenscraig steel complex. Hon. Members without specialised knowledge of the steel industry are right to be concerned over the future of this basic industry. Most people would be satisfied with the programme of expansion which the British Steel Corporation had announced—suggesting that the industry would move by 1981 to producing 43 million tons and that over that period of time there would be expenditure of £4,000 million.

Concern has arisen because these ambitious expansion plans have been thrown in doubt because of the Government's decision to institute a general review of the steel industry. Concern has been felt by those interested in the industry's future about the Government's attitude to the price increase. The way in which this was handled, by a last-minute intervention on the part of the Prime Minister, hardly indicated that it was a well-considered decision. More important is the criteria which the Government are to apply during this general review. I am suspicious that this is not just an objective view to take stock of the future of the industry and to work out its development. There is being confused with a general review the Government's interest in hiving-off certain parts of the industry to private interests.

I was disturbed to read in the business section of yesterday's Sunday Times an article headed "Signs of a truce in steel battle." The article speaks of a difference of opinion between Lord Melchett and the Government and goes on in the final paragraph: … the Government, while determined to secure some measure of denationalisation, is anxious to avoid Melchett's resignation. Still less would it like to have to legislate to enforce any sales. But it can offer the bargaining counter of finance for B.S.C. expansion plans. So talks have settled down to simple horse-trading. So much development cash will be swapped for so much denationalisation and a truce for the steel industry may at last be within reach. I hope that that article is inaccurate and that the Minister can tell us that the future of the steel industry is not being decided on the basis of horse-trading between the doctrinaire policies of the Government and the genuine needs of a development policy for the industry. To confuse the doctrinaire politics of the party opposite with the urgent need for a proper development plan for the industry is acting contrary to the national interest. I hope that there is none of this horse-trading going on and that the attitude being taken is that Britain needs a steel industry of the size envisaged by the Corporation and only if it reaches that size will there be any question of their being a green field site anywhere in the United Kingdom. There will be disputes between different parts of the House as to where the green field site should be. At this stage of the development of the steel industry we have to unite to make sure that there will be an expansion big enough to have a green field site anywhere in the United Kingdom. The matter is as serious as that. We must fight to ensure that the Government have a sufficient expansion plan, otherwise there will be nowhere in the United Kingdom for a green field site.

A great deal is said by Conservative Members about the criterion of profitability and that if there is to be any expansion of the industry it should be done only on a profitable basis. There is some elasticity in the meaning of the word "profitable", I hope it will not be thought to be a narrow, commercial criterion of short-term gain to be applied to the future of the steel industry. The notion of profitability should be looked at in a wider sense in the future, including the national interest. The sums of money involved to make the industry the great industry of the future are so large that to apply short term commercial criteria is to apply completely the wrong test. If ever there was an industry where the Government has to combine a concern with the industry's future with the national interest as a whole, it is this particular industry at this particular time.

I do not care where the money comes from, whether from private or public sources, but the money should be found for the industry's expansion. Hon. Members opposite should abjure their doctrinal attitudes to public, as opposed to private, finance and units behind the proposition that we must enable this basic industry to reach a level at which we shall be a major steel-producing nation. If we do not do that, in the 1980s we shall find ourselves not only a minor steel-producing nation but a minor industrial country.

9.11 p.m.

Mr. Eric G. Varley (Chesterfield)

Like the debate which we had on 18th March, this debate has inevitably centred a good deal on the impact of the redundancies announced in the steel industry, and my hon. Friends have again related the hardship and problems in their constituencies. They are right to do so. As my hon. Friend the Member for Newport (Mr. Roy Hughes) said, with the unemployment position worse than at any time since the 1930s, the situation is one of desperate seriousness. Redundancies at any period are of great concern, but when they come at a time when the Government are taking no action to reflate the economy and when the Chancellor's Budget judgment is seen to do nothing to restore business confidence, every announcement of laying off of men is a double blow.

The debate also, quite rightly, has been concerned with the steel industry's future. One has only to talk to those who work in the industry to realise that morale is at a very low level. I was surprised when the Secretary of State said that there was no hostility between the Government and the British Steel Corporation. When the Government have subjected the Corporation to the sort of review and intervention that they have, and when the Corporation has these arm-twisting tactics inflicted upon it, it is stretching words a little, to suggest that there is no conflict. There is no doubt that a year ago people working in the industry had confidence in the future and the co-operation between men and management had never been greater. But over the last few months all this has been shattered, and certainly in the last two months, since the last debate, there has been a further deterioration. For this situation the Government must take the entire responsibility.

The industry's workers and their unions realised that the restructuring of the industry was to take place. That has been mentioned by hon. Members opposite. But the crucial difference, and one which it is necessary to spell out, was that the co-operation and trust of all those who worked in the industry had been won. The whole package had been accepted by those in the industry.

The package consisted basically of a fundamental belief in an expanding steel industry; an expanding industry with secure employment prospects for those retained in it, an industry which was adequately capitalised, an industry capable of meeting the country's long-term needs in terms of output and balance of payments, an industry in which—if rationalisation were to take place—it would be done without panic and in a humane and civilised manner.

I do not think that that has happened over the last few months. In the past months the Government have subjected the industry to the most remorseless degree of intervention, something that the Secretary of State said he wanted to get away from. It would not be so bad if the intervention were based on a wish to get a better industry and not on political prejudice.

I am not saying that the political prejudice has come from the Secretary of State, but I think that there were others within his Department who were prejudiced against the Corporation. The hon. Member for Cambridge (Mr. Lane) mentioned the Conservative Party election manifesto, which contained these words: We will progressively reduce the involvement of the State in the nationalised industries—for example, the steel industry. There has been unprecedented intervention in this industry.

We had expected that the Secretary of State would have made a statement by today about the first phase of the review. On 5th April he said that the first part would be ready within six weeks. Today he said that that had slipped by only two days. But 5th April was seven weeks ago.

Mr. Hardy

My hon. Friend has mentioned seven weeks. In fact, we are now in the tenth week since the Secretary of State gave that undertaking.

Mr. Varley

I do not place it exactly as my hon. Friend does. I calculate it as being about seven weeks. However, I agree with my hon. Friend that we had expected that by this time the Secretary of State would have made an announcement. Now the Government have got themselves into a tangle over the future of the industry. A statement was essential, because of the vital need to confirm the future of the industry's other product divisions, in the same way as the Secretary of State appeared to confirm the future of the bulk iron and steel making activities.

I want to put a question to the Minister for Industry about the Hunterston project. We were told by the Secretary of State that the bulk steel making activity would be intact and would remain part of the corporation. Rumours and reports are circulating that the Government are encouraging foreign interests to come into bulk steel making. There is a report circulating in Scotland that the Government are encouraging a Dutch interest to look at the Hunterston site as one of the possibilities for a new green field site. If there is any truth in that we should like to know the facts.

We were hopeful that at least the Secretary of State would have been able to confirm that the special steels, construction, chemicals and tubes would remain intact. We were specially hopeful that the Secretary of State would by now have had something to say about the additional price increase of 7 per cent. which was refused by the Government in April. Even in advance of the announcement that the right hon. Gentleman has promised about the review, the House is entitled to a statement from the Minister for Industry tonight about this price increase. I was encouraged when the hon. Member for the New Forest (Mr. Patrick McNair-Wilson) made it plain that the steel industry should be allowed to have the 14 per cent. or at least that other steps should be taken to tell us how the industry will cope.

We are told by the Press, at least, that the Secretary of State is, in principle, in favour of an additional price rise for the British Steel Corporation, but we know from other events that he cannot decide this matter in isolation. The Prime Minister has intervened. To a great extent, the evidence shows that the Prime Minister has taken over the pricing policy of the steel industry. The confusion becomes deeper and deeper. In its election manifesto, the Conservative Party said that it would reduce the involvement of the State in the steel industry, and, as I say, the Secretary of State, at meetings which we have had with him and again in the House today, seems to confirm that he too, is anxious to get away from this intervention. The Prime Minister, on the other hand, boasts that the steel industry is one of the props of his economic strategy.

On 15th May, when he addressed the Scottish Tories in Socialist Aberdeen, the Prime Minister had this to say: When we acted to cut the proposed steel price increases in half, there was a howl of opposition. There was a howl of approval at that; it was stirring stuff for the Scottish Tories. But the Prime Minister gave it all away when he blurted out at Question Time on 4th May: What I do know is that the interference with those prices"— that is, steel prices— will give the whole of British industry a better opportunity of competing in world markets."—[OFFICIAL REPORT, 4th May, 1971; Vol. 816, c. 1169.] So that is it. The Prime Minister says that that is part of his economic strategy, it is one of his economic props. As my hon. Friend the Member for Newport said, we thought that the only economic weapon which the Government had was unemployment, but now they have this other weapon, the use of the steel industry to subsidise our country's exports.

There may well be those who say, "Fair enough", who would welcome the Prime Minister's conversion to the principle of manipulating publicly-owned industries as an instrument of Socialist planning. But, if that be so, two fundamental questions arise. First, is it fair to the steel industry to expect it to subsidise privately-owned industry at the expense of its own workers' wages, as my hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths) said, and its employment structure? Second, if the steel industry is now such an integral part of the Government's economic strategy, is it not utter folly not to allow it to go ahead with its long-term plans to establish and secure its own future? The Prime Minister, with that sort of stuff in Aberdeen and in answer to Questions in the House, may get away with it on the spur of the moment, but he should not be allowed to get away with it without an explanation from the Government.

There is another side to the question. I do not dispute that there is something to be said for the Government taking action to stop price increases. But, as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said, if the Prime Minister and the Government want to be taken seriously, and if they are intervening to improve the competitive position of British industry, it is about time they started taking action in other respects. When they take action, for example, to stop a price increase in the oil industry, which seems to put up its prices before the ink dries on the contracts it signs with the sheikhs, we may begin to take them seriously.

The House is entitled to know what the Government's attitude is now to the financial position of the British Steel Corporation. Is it, for example, the Government's firm intention to hold the price of steel down to a level below that which the market will plainly stand, below the level of European prices? If it is, the Minister should say so plainly when he winds up He should tell us whether it is the Government's policy, whether it is the Prime Minister's policy, as the right hon. Gentleman suggested on 4th May, to subsidise our export industries.

At the same time, let us be told what action the Government intend to take to stop comparable price increases in the private sector. Half the Corporation's turnover is accounted for by raw materials and the purchase of equipment. It is a section of its business over which it has only marginal control. The equipment and materials it requires have gone up by about 20 per cent. Everyone knows that that is a burden it cannot afford for long without encountering serious deficit. So before we have any more sort of "Aims of Industry" howls about inefficient nationalised industries, we are entitled to be told by the Government exactly how they propose to deal with that matter.

We were hoping at least that the right hon. Gentleman would confirm that profitable parts of the steel industry would not be hived off. From time to time we hear from hon. Members opposite that the steel industry should be restricted to bulk steel making. That is most doctrinaire. Fortunately, today we have not heard that quite as much as on previous occasions. The hon. Members for Cambridge, the New Forest and Canterbury (Mr. Crouch) took quite a sensible view on these matters. They said that there would be a hiving on and a bit of hiving off, but they were reasonably flexible, unlike some hon. Members opposite who say that bulk steel making is for the Corporation and that the rest should be hived off. That is doctrinaire nonsense, and I am pleased to see a change of attitude among Conservative hon. Members.

Every industry, whether publicly- or privately-owned, seeks to diversify. All our great firms seek to diversify, and not to have done so would have led to economic ruin. It would have been madness to confine the Corporation to bulk steel making, the most debilitating formula that could possibly be inflicted on management. It would also be disastrous for the nation. I wonder how much time leading people within the Corporation have had to spend in trying to combat the Government's attempts to weaken the industry. There must have been hours and hours wasted between officials of the Department of Trade and Industry and the Corporation in sterile argument and wrangles about the shape of the industry. I cannot imagine for one moment that the officials of the Department had any enthusiasm for that. They cannot have had much stomach for this kind of exercise. But loyally they must have tried to fulfil the prejudices of their Ministers. I do not think that the prejudice is so much on the part of the Secretary of State, but it is to a great extent that of junior Ministers in his Department.

The so-called review is being carried out exclusively by officials, we understand. We at least expected a Minister to head it. At least the Minister for Industry or the Under-Secretary ought to have been prepared to carry out this work, which I firmly believe they started.

The Government would do well to take note of what the Confederation of British Industry has said on this matter. Mr. Campbell Adamson, speaking at Cambridge during the last 12 days, and reported in the Financial Times, said of the "unhealthy"—his own word—degree of uncertainty about the Government's intentions towards the nationalised industries: Public corporations must be subject to the same disciplines as the private sector. Equally, Government should not interfere with the day-to-day operations of the corporations". He went on to say: Government should stop using public corporations as instruments of Government policy. Public corporations should be operated in a commercial manner. Any manufacture undertaken or services provided at the request of Government for reasons of social policy should be treated separately in the accounts. If publicly-owned corporations were to operate commercially, and were to recruit and retain management of high quality, they must have some freedom to undertake ancillary activities in the same way as the Boards of private companies might decide to diversify". He continued: … no industry can operate successfully if it is continually in doubt about its long-term future". That is the most damning condemnation of the Government. In all aspects that speech might have been delivered with the British Steel Corporation and its situation in mind and the Government would do well to heed it. We are told that the Director-General of the C.B.I. is to talk to the Secretary of State for Trade and Industry soon. He probably talks to him much more often than I get to know about from my research. The right hon. Gentleman should heed Mr. Campbell Adamson's advice.

Mr. Campbell Adamson seemed to have found support in The Times only four days ago. Under the heading Fair play for the British Steel Corporation", The Times said: Ministers must make up their mind once and for all whether they are going to allow the Corporation to set its own prices, or whether they will provide money in other ways to finance the industry's capital pro- jects … ministers cannot on the one hand preach the gospel of less interference in state industries, and on the other peg the price of steel and castigate the corporation for failing to move into the black … ending the intolerable uncertainty to which the industry has been subjected for so long". If Britain is to strengthen its industrial position, if we care about the future standard of living and full employment of those who work in it and the future economic prospects for our nation, we must have a strong and secure steel industry. The Government must face this fundamental issue: do they really want a steel industry of the size and strength to meet our future needs? They must make up their mind whether they will continually niggle and harry the Corporation to suit basically the prejudices of the junior Ministers in the Department of Trade and Industry or the whims of the Prime Minister.

Our very standard of living—that is the sort of level on which I put this matter—and, equally important, a high level of employment are dependent upon an expanding steel industry and not a declining industry bewildered and frustrated by Government intervention. We hope that eventually, even under this Government, the economy will get moving again and we shall have a strong steel industry. But over the past few months the Government have failed the industry and those who work in it, basically not to achieve a better steel industry, but out of political prejudice, and motivated for that reason, in direct contradiction of their election manifesto. They have replaced what I believe to have been a carefully phased plan with uncertainty, apprehension and confusion.

For these reasons I call on the House to vote against this example of new-style Tory Government—Tory Government that we should regret.

9.35 p.m.

The Minister for Industry (Sir John Eden)

Like other hon. Members who have spoken in this debate I welcome the fact that it is taking place. I agreed very much with the words which were used by my hon. Friend the Member for Canterbury (Mr. Crouch) who said that he felt that this was a more constructive debate than our last one. I am sure that that is so, and I am sure that other hon. Members who have taken part in it will feel the same thing.

I think that this fact owes very much—I hope not to cause any embarrassment to him by saying so—to the way in which the hon. Gentleman the Member for Ebbw Vale (Mr. Michael Foot) opened the case for the Opposition. He seemed to recognise that there has to come a time when, to use a phrase quoted by my hon. Friend the Member for the New Forest (Mr. Patrick McNair-Wilson), it would be helpful to bring to an end the political onslaughts on this industry. I think the hon. Gentleman the Member for Ebbw Vale was saying that largely because he realised as much as does every hon. Gentleman, I think, who has a steel industry constituency, or is in any way closely associated with the steel industry, that there are large numbers of people outside this House who have a very real concern in the decisions which this Government are considering, and are, therefore, watching very closely indeed the course of the debates and the nature of the discussions affecting this industry. I absolutely understand that, and I agree very much on this point with my hon. Friend the Member for Cambridge (Mr. Laine), who dwelt on this in his very constructive speech, when he reminded us here of the number of people who are affected by our consideration of this industry.

It has often been used as a taunt against me that I do not have any steel works in my constituency, but this, happily, has not prevented me from becoming very closely associated with the industry. During the last few months I have been in Government I have had opportunity, as some hon. Members know, to visit many of the major works, and to meet many of the people concerned with them. I should like just to put on record—and I think anybody who has been through this experience will agree with me—that the great quality and the calibre of the people one meets in the industry is absolutely second to none.

This is an industry which has, sadly for it, but understandably, I think, always been very susceptible to political pressures. Nationalisation was an extreme example of that, and to have inflicted it twice on the industry was really ideology gone mad Hon. Gentlemen opposite have frequently, during this debate and at other times, accused us during these last few months of contributing towards uncertainty in the industry, but, as many of my hon. Friends have said, this is as nothing to the damage which hon. Gentlemen opposite did to this industry twice in recent years.

Mr. Dennis Skinner (Bolsover)

The Minister is talking about nationalisation of the industry twice, but will he give any indication at all whether or not he would make the same comment if we re-nationalise once again some of the hived-off parts of industry, as he is proposing they should be hived off?

Sir J. Eden

I think that the hon. Gentleman had better wait to see the course which events take and whether he or his party are ever again in the position to do some of the damage they did. I am sure that not even the most ardent advocates of nationalisation could claim that their hopes for it had been realised in the event.

However, as my right hon. Friend the Secretary of State for Trade and Industry said, although we have always been opposed to the methods employed, there were, clearly, aims and objectives of which, broadly speaking, one approved. One of those objectives was to cut out uneconomic units within the organisation itself, and the other was to work towards larger, integrated production units. It was with these objectives in mind——

Mr. Eric S. Heffer (Liverpool, Walton)

Why was it not done under private enterprise? That was the whole point of nationalisation.

Sir J. Eden

Clearly, the hon. Gentleman has not studied the Benson proposals——

Mr. Heffer

Never mind about the proposals.

Sir J. Eden

If this industry had been left to develop in the normal course of events——

Mr. Heffer

—we would not have one.

Sir J. Eden

—we would have more than one unit of ownership at present and probably far greater profitability.

The objectives which I have defined are broadly acceptable to both sides of the House, and it was with these objectives in mind, and with an awareness of the nature of international developments, that we began our study of this industry. I was struck by the speech of my hon. Friend the Member for the New Forest, and I assure him that in our study we had a real understanding of what he described as the technological, economic and political influences at work in the industry. It was in pursuit of these same objectives that the closure programme was recently announced. It has always been made plain that substantial rationalisation of production facilities was essential if the Corporation was to become financially viable and achieve the level of efficiency necessary to meet international competition.

This has been well understood and fully accepted. I agree with the hon. Member for Cleveland (Mr. Tinn) that it is to the credit of the trade unions that they have understood from the beginning that a substantial reduction in our total iron and steel making labour force was the unavoidable result of this rationalisation process. This is still clearly understood, and everyone who has the future of the industry at heart knows full well that it has to go through this process, painful though it is to individuals affected by it, to achieve that degree of stability and viability which is the aim.

Mr. John Mendelson

Will the Minister assure the House and the steel industry that the Government will adhere to the original plan proposed by Lord Melchett of spreading redundancies over five, seven, eight or ten years, and that, as part and parcel of these redundancies, new steel capacity will be brought into existence and new jobs created so that redundancies are reduced to a minimum?

Sir J. Eden

I am coming on to these points. I would prefer to keep to the sequence I have prepared.

Mr. Michael Foot

Before the hon. Gentleman claims, as is the case, that the unions agreed to the development plan, surely he must accept that they agreed only on the basis that expansion would go forward. We want to know when the Government will allow it to go forward.

Sir J. Eden

This is the point made by the hon. Member for Penistone (Mr. John Mendelson). This is the whole point of the debate and of the review. These answers will be coming forward.

I think the House accepts that this process of closure in the first stage is recognised as being essential in the progress towards viability. There is a clear need to base the order load on more modern, low-cost plant rather than aggravate the difficulties of the Corporation by keeping older, less efficient and more costly plant in operation when it can be closed.

The closures which have been announced are to be spread forward over a period of years, the main ones taking place in 1971–73. The whole package of proposals for closures which it is within the power of the Corporation to make are subject to discussions with the unions concerned. These have already begun. The exact timing of them will obviously depend on the conclusion of the discussions in which the Corporation is engaged. Discussions are also taking place with regional planning authorities—and this answers a point raised by my hon. Friend the Member for Canterbury—with the local authorities and the Government Departments concerned on the total employment effects. Naturally we have to have regard to the level of unemployment in areas affected by other, more general economic pressures. We have this very much in mind, and my right hon. Friend the Chancellor had this in mind in his Budget proposals. We hope that these will lead to a considerable upturn generally.

Mr. John Mendelson

What about the expansion of the industry?

Sir J. Eden

I am coming to that. The Corporation has its own social policy unit which is working to achieve maximum redeployment, both within the Corporation and outside it. It will also do its best to assist in the creation of new jobs in areas affected by the closures. It is in this context that I shall refer to the speeches of my hon. Friends the Members for Stretford (Mr. Churchill) and Rossendale (Mr. Bray) concerning the situation affecting employment at Irlam.

Irlam is a particularly difficult decision for the Corporation, because here is an area where the employment prospects are very much dependent on the Corporation or upon steel-making activities. The hon. Member for Stretford was careful to say that it need not rest solely with the Corporation. The point that really matters in a case like Irlam is not whether it is public or private sector but that there shall be some employment prospects for the people affected to this degree by the proposed closure. I hope that in giving consideration to this, the Corporation will make every effort to view most sympathetically any proposals which would result in continued employment for the men affected. I am sure that it will do so and I am sure that it would be in furtherance of the aims and objectives of the social policy unit if it was to do it as openly and constructively as possible.

The main contention of the Opposition has been that closures, on the one hand, are all very well and it understands the need for them, but they must be balanced, on the other hand, by an investment programme in new plant and capacity. I understand this and it is not our purpose to bring the Corporation to a standstill or to bring the industry to an end. We could not do this even if we were so minded and it would be an absurd attitude to take. We have been confronted with the paradox of the prospect of unprofitability on the one hand and the very ambitious scale of the Corporation's investment plans on the other.

These two factors coming together forced us into having to conduct a penetrating re-appraisal into four separate but closely inter-related studies. There is the short-term financial review affecting plans for the year 1971–72, there is the longer-term strategy for a decade, there is the review of the structure of the industry as a whole, and there is the relationship between the Government and the industry. Those are the four strands in one's whole study of the industry and the implications for its future development in the economy.

The short-term financial review will cover the anticipated financial out-turn and, of course, implications for pricing. A number of hon. Members, including the hon. Member for Consett (Mr. David Watkins), the hon. Member for Rother Valley (Mr. Hardy), and the hon. Member for Chesterfield (Mr. Varley), as well as some of my hon. Friends, asked about pricing and the prospective future pricing policy under this Government. I take this opportunity to remind hon. Members opposite of their own intervention when they were in office. When proposals for price increases were put forward by the Corporation, they were referred to the National Board for Prices and Incomes and were subjected to abatement by the then Government. There is the additional fact that in October of last year the Government approved the full price increase requested by the Corporation. That was done against a large part of opinion in the country. That was fairly rapidly followed by the last price increase proposal, and we have to take account of views put to us by the independent sector and by steel users.

As my hon. Friend the Member for Stretford said, many users of steel were concerned not only at the extent of the price increases proposed but at the speed with which they followed ones which had only recently been endorsed. We also had to take account of the fact that certain statutory procedures are involved as a result of the 1967 Act in the event of views being expressed by the Iron and Steel Consumers Council. That body made formal representations to the Government, and, as a result of measures brought into law by the previous Administration, we had no alternative but to react to them.

The short-term financial review will also consider the investment programme in the context of the £185 million programme which was approved by the Government towards the end of last year. There is no justification for seeking to imply that in investment terms we are bringing the industry to a standstill. One has only to look back over the figures to realise that. In 1968–69 the industry's investment programme was £62 million; in 1969–70 it was £80 million; in 1970–71 it was £140 million; and that for 1971–72 approved at the end of last year is £185 million.

It is in that context that one should see the Ravenscraig decision. Although we have tried patiently to explain this matter to the hon. Member for Motherwell (Mr. Lawson), he still feels perplexed by it.

Mr. Lawson

So does everybody else.

Sir J. Eden

Then perhaps I should try to spell out the matter for the hon. Member again. The Ravenscraig proposal was accepted by the then Government in early 1970 and was included in the Corporation's capital development programme. Approval was given in November, 1970, by the present Government for expenditure of £185 million in 1971–72. It is this which is now subject to the present review.

As a result of this review, my right hon. Friend asked the Corporation to submit for his approval any particular projects with which it wished to proceed. Ravenscraig is one of the projects on which expenditure might be incurred by the Corporation in 1971–72, but the start on the projects during the course of the short-term review is subject to special approval. The Corporation has not brought forward a request to start Ravenscraig while the review has been in progress. Therefore, there has been no immediate proposal before the Government and the Government have not held back work at Ravenscraig. This matter is not in the same context as that at Llanwern. This is in the hands of the B.S.C. and I have no doubt that, in the light of the announcement of the decisions on the review, which my right hon. Friend has said will take place as soon as possible after Whitsun, it will then be for the Corporation to decide about the project within the approved level of investment. I hope that makes the matter abundantly clear to the hon. Member for Motherwell.

Mr. Lawson

Does the hon. Gentleman agree that what I said earlier is correct—in other words, if we understand what he is now saying, there are no schemes whatever now being held up by the Government?

Sir J. Eden

The hon. Gentleman has got the message quite clearly from the very detailed and careful elucidation I gave to him just now on the question of Ravenscraig. In addition to the short-term review, there is also the question of

the long-term project side, which will bring into consideration all those matters to which my hon. Friend the Member for Canterbury and others referred: the question of the extent of the expansion of the industry, whether or not to proceed with the green field site, ore and coking coal supplies, the greater degree of manufacturing operation to take place at the source of raw material supply, and we are bound to have in mind the views put forward in the interesting speech of my hon. Friend the Member for Sheffield, Heeley (Mr. Spence). We will also have to take into account the regional implications and the question of developing technology.

Mr. Tinn rose——

Sir J. Eden

These are all matters which are bound up in the long-term review, and then are of fundamental importance to the nature of the steel industry.

The hon. Member for Ebbw Vale and others took us to task for the fact that the short-term review had been handled by officials. This does not in any way detract from Ministerial responsibility. Ministers have got to take the decisions, and we will take them, taking into account the full interests of the industry and the economy of this country. We will also take into account, since the opportunity has been given us to do so, the views expressed by hon. Members during this debate. May I finally emphasise to the House——

Mr. Joseph Harper (Pontefract) rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the Amendment be made:—

The House divided: Ayes 272, Noes 224.

Division No. 371.] AYES [10.0 p.m.
Adley, Robert Barber, Rt. Hn. Anthony Bossom, Sir Clive
Alison, Michael (Barkston Ash) Batsford, Brian Bowden, Andrew
Allason, James (Hemel Hempstead) Beamish, Col. Sir Tufton Boyd-Carpenter, Rt. Hn. John
Amery, Rt. Hn. Julian Bell, Ronald Braine, Bernard
Archer, Jeffrey (Louth) Benyon, W. Bray, Ronald
Astor, John Biffen, John Brewis, John
Atkins, Humphrey Biggs-Davison, John Brinton, Sir Tatton
Awdry, Daniel Boardman, Tom (Leicester, S. W.) Brocklebank-Fowler, Christopher
Baker, Kenneth (St. Marylebone) Body, Richard Brown, Sir Edward (Bath)
Baker, W. H. K. (Banff) Boscawen, Robert Bruce-Gardyne, J.
Buchanan-Smith, Alick (Angus, N & M) Holland, Philip Pink, R. Bonner
Buck, Antony Hordern, Peter Pounder, Rafton
Bullus, Sir Eric Hornby, Richard Powell, Rt. Hn. J. Enoch
Burden, F. A. Hornsby-Smith, Rt. Hn. Dame Patricia Price, David (Eastleigh)
Campbell, Rt. Hn. G. (Moray & Nairn) Howe, Hn. Sir Geoffrey (Reigate) Proudfoot, Wilfred
Carlisle, Mark Howell, David (Guildford) Quennell, Miss J. M.
Channon, Paul Howell, Ralph (Norfolk, N.) Raison, Timothy
Chapman, Sydney Hunt, John Redmond, Robert
Chichester-Clark, R. Hutchison, Michael Clark Reed, Laurance (Bolton, E.)
Churchill, W. S. Iremonger, T. L. Rees, Peter (Dover)
Clark, William (Surrey, E.) James, David Rees-Davies, W. R.
Clarke, Kenneth (Rushcliffe) Jenkin, Patrick (Woodford) Renton, Rt. Hn. Sir David
Clegg, Walter Jennings, J. C. (Burton) Rhys Williams, Sir Brandon
Cockeram, Eric Jessel, Toby Ridley, Hn. Nicholas
Cooke, Robert Johnson Smith, G. (E. Grinstead) Ridsdale, Julian
Coombs, Derek Jones, Arthur (Northants, S.) Roberts, Wyn (Conway)
Cooper, A. E. Jopling, Michael Rodgers, Sir John (Sevenoaks)
Cordle, John Joseph, Rt. Hn. Sir Keith Rossi, Hugh (Hornsey)
Corfield, Rt. Hn. Frederick Kellett, Mrs. Elaine Rost, Peter
Cormack, Patrick Kershaw, Anthony Royle, Anthony
Costain, A. P. Kilfedder, James Russell, Sir Ronald
Critchley, Julian Kimball, Marcus Scott-Hopkins, James
Crouch, David King, Evelyn (Dorset, S.) Sharples, Richard
Crowder, F. P. King, Tom (Bridgwater) Shaw, Michael (Sc'b'gh & Whitby)
Curran, Charles Kinsey, J. R. Shelton, Willliam (Clapham)
Davies, Rt. Hn. John (Knutsford) Kirk, Peter Simeons, Charles
d'Avigdor-Goldsmid, Sir Henry Knight, Mrs. Jill Sinclair, Sir George
d'Avigdor-Goldsmid, Maj.-Gen. James Knox, David Skeet, T. H. H.
Dean, Paul Lambton, Antony Smith, Dudley (W'wick & L'mington)
Deedes, Rt. Hn. W. F. Lane, David Soref, Harold
Digby, Simon Wingfield Langford-Holt, Sir John Speed, Keith
Dixon, Piers Legge-Bourke, Sir Harry Spence, John
Douglas-Home, Rt. Hn. Sir Alec Le Marchant, Spencer Sproat, Iain
Drayson, G. B. Lewis, Kenneth (Rutland) Stainton, Keith
Dykes, Hugh Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield) Stanbrook, Ivor
Eden, Sir John Longden, Gilbert Steel, David
Elliot, Capt. Walter (Carshalton) Loveridge, John Stewart-Smith, D. G. (Belper)
Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Eyre, Reginald Luce, R, N. Stodart, Anthony Edinburgh, W.)
Farr, John McAdden, Sir Stephen Stoddart-Scott, Col. Sir M.
Fenner, Mrs. Peggy MacArthur, Ian Stokes, John
Fidler, Michael McCrindle. R. A. Stuttaford, Dr. Tom
Finsberg, Geoffrey (Hampstead) McLaren, Martin Sutcliffe, John
Fisher, Nigel (Surbiton) Maclean, Sir Fitzroy Taylor, Sir Charles (Eastbourne)
Fletcher-Cooke, Charles Macmillan, Maurice (Famham) Taylor, Edward M. (G'gow, Cathcart)
Fookes, Miss Janet McNair-Wilson, Michael Taylor, Frank (Moss Side)
Fortescue, Tim McNair-Wilson, Patrick (NewForest) Tebbit, Norman
Fowler, Norman Maddan, Martin Temple, John M.
Fox, Marcus Madel, David Thatcher, Rt. Hn. Mrs. Margaret
Fraser, Rt. Hn. Hugh (St'fford & Stone) Maginnis, John E. Thomas, John Stradling (Monmouth)
Fry, Peter Marples, Rt. Hn. Ernest Thompson, Sir Richard (Croydon, S.)
Galbraith, Hn. T. G. Marten, Neil Thorpe, Rt. Hn. Jeremy
Gardner, Edward Mather, Carol Tilney, James
Gibson-Watt, David Maude, Angus Trafford, Dr. Anthony
Gilmour, Sir John (Fife, E.) Maudling. Rt. Hn. Reginald Trew, Peter
Glyn, Dr. Alan Mawby, Ray Tugendhat, Christopher
Godber, Rt. Hn. J. B. Maxwell-Hyslon, R. J. Turton, t. Hn. R. H.
Goodhew, Victor Meyer, Sir Anthony van Straubenzee, W. R.
Gorst, John Mills, Peter (Torrington)
Gower, Raymond Mills, Stratton (Belfast, N.) Vaughan, Dr. Gerard
Gray, Hamish Mitchell. Lt.- Col. C. (Aberdeenshire, W.) Vickers, Dame Joan
Green, Alan Mitchell. David (Basingstoke) Waddington, David
Griffiths, Eldon (Bury St. Edmunds) Moate, Roger Walder, David (Clitheroe)
Grimond, Rt. Hn. J. Molyneaux, James Walker-Smith, Rt. Hn. Sir Derek
Grylls, Michael Money, Ernie Walters, Dennis
Gummer, Selwyn Morgan, Geraint (Denbigh) Ward, Dame Irene
Gurden, Harold Morrison, Charles (Devizes) Warren, Kenneth
Hall, Miss Joan (Keighley) Mudd, David Weatherill, Bernard
Hall, John (Wycombe) Murton, Oscar White, Roger (Gravesend)
Hall-Davis, A. G. F. Neave, Airey Whitelaw, Rt. Hn. William
Hamilton, Michael (Salisbury) Nicholls, Sir Harmar Wiggin, Jerry
Hannam, John (Exeter) Noble, Rt. Hn. Michael Wilkinson, John
Harrison, Brian (Maldon) Normanton, Tom Wolrige-Gordon, Patrick
Harrison, Col. Sir Harwood (Eye) Nott, John Wood, Rt. Hn. Richard
Haselhurst, Alan Onslow, Cranley Woodhouse, Hn. Christopher
Havers, Michael Orr, Capt. L. P. S. Woodnutt, Mark
Hawkins, Paul Osborn, John Worsley, Marcus
Hay, John Owen, Idris (Stockport, N.) Wylie, Rt. Hn. N. R.
Heseltine, Michael Page, Graham (Crosby) Younger, Hn. George
Hicks, Robert Page, John (Harrow, W.)
Higgins, Terence L. Parkinson, Cecil (Enfield, W.) TELLERS FOR THE AYES:
Hiley, Joseph Percival, Ian Mr. Jasper More and
Hill, John E. B. (Norfolk, S.) Peyton, Rt. Hn. John Mr. Hector Monro.
Abse, Leo Harrison, Walter (Wakefield) O'Malley, Brian
Albu, Austen Hart, Rt. Hn. Judith Oram, Bert
Allaun, Frank (Salford, E.) Heffer, Eric S. Orbach, Maurice
Archer, Peter (Rowley Regis) Horam, John Orme, Stanley
Armstrong, Ernest Houghton, Rt. Hn. Douglas Oswald, Thomas
Ashton, Joe Huckfield, Leslie Owen, Dr. David (Plymouth, Sutton)
Atkinson, Norman Hughes, Rt. Hn. Cledwyn (Anglesey) Paget, R. T.
Bagier, Gordon A. T. Hughes, Mark (Durham) Palmer, Arthur
Barnett, Joel Hughes, Robert (Aberdeen, N.) Pannell, Rt. Hn. Charles
Beaney, Alan Hughes, Roy (Newport) Parker, John (Dagenham)
Bennett, James (Glasgow, Bridgeton) Hunter, Adam Parry, Robert (Liverpool, Exchange)
Bidwell, Sydney Irvine, Rt. Hn. Sir Arthur (Edge Hill) Pavitt, Laurie
Blenkinsop, Arthur Janner, Greville Peart, Rt. Hn. Fred
Boardman, H. (Leigh) Jay, Rt. Hn. Douglas Pentland, Norman
Booth, Albert Jeger, Mrs. Lena (H'b'n & St. P'cras, S.) Prentice, Rt. Hn. Reg.
Boyden, James (Bishop Auckland) Jenkins, Hugh (Putney) Price, J. T. (Westhoughton)
Bradley, Tom Jenkins, Rt. Hn. Roy (Stechford) Price, William (Rugby)
Brown, Hugh D. (G'gow, Provan) John, Brynmor Probert, Arthur
Brown, Ronald (Shoreditch & F'bury) Johnson, Carol (Lewisham, S.) Rankin, John
Buchan, Norman Johnson, James (K'ston-on-Hull, W.) Reed, D. (Sedgefield)
Buchanan, Richard (G'gow, Sp'burn) Jones, Barry (Flint, E.) Rees, Merlyn (Leeds, S.)
Butler, Mrs. Joyce (Wood Green) Jones, Dan (Burnley) Rhodes, Geoffrey
Callaghan, Rt. Hn. James Jones, Rt. Hn. Sir Elwyn (W. Ham, S.) Richard, Ivor
Campbell, I. (Dunbartonshire, W.) Jones, Gwynoro (Carmarthen) Roberts, Albert (Normanton)
Carmichael, Neil Jones, T. Alec (Rhondda, W.) Roberts, Rt. Hn. Goronwy (Caernarvon)
Carter-Jones, Lewis (Eccles) Judd, Frank Robertson, John (Paisley)
Castle, Rt. Hn. Barbara Kaufman, Gerald Roderick, Caerwyn E. (Br'c'n & R'dnor)
Clark, David (Colne Valley) Kelley, Richard Roper, John
Concannon, J. D. Kerr, Russell Rose, Paul B.
Conlan, Bernard Kinnock, Neil Ross, Rt. Hn. William (Kilmarnock)
Corbet, Mrs. Freda Lambie, David Sheldon, Robert (Ashton-under-Lyne)
Cox, Thomas (Wandsworth, C.) Lamond, James Shore, Rt. Hn. Peter (Stepney)
Crawshaw, Richard Latham, Arthur Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Cronin, John Lawson, George Short, Mrs. Renée (W'hampton, N. E.)
Crossman, Rt. Hn. Richard Leadbitter, Ted Silkin, Rt. Hn. John (Deptford)
Dalyell, Tam Lee, Rt. Hn. Frederick Silkin, Hn. S. C. (Dulwich)
Darling, Rt. Hn. George Leonard, Dick Sillars, James
Davidson, Arthur Lestor, Miss Joan Silverman, Julius
Davies, Denzil (Llanelly) Lever, Rt. Hn. Harold Skinner, Dennis
Davies, G. Elfed (Rhondda, E.) Lewis, Arthur (W. Ham N.) Small, William
Davies, Ifor (Gower) Lewis, Ron (Carlisle) Smith, John (Lanarkshire, N.)
Davis, Clinton (Hackney, C.) Lipton, Marcus Spearing, Nigel
Deakins, Eric Loughlin, Charles Spriggs, Leslie
Delargy, H. J. Lyon, Alexander W. (York) Stallard, A. W.
Dell, Rt. Hn. Edmund Lyons, Edward (Bradford, E.) Stoddart, David (Swindon)
Dempsey, James Mabon, Dr. J. Dickson Stonehouse, Rt. Hn. John
Doig, Peter McBride, Neil Strang, Gavin
Douglas, Dick (Stirlingshire, E.) McCartney, Hugh Strauss, Rt. Hn. G. R.
Douglas-Mann, Bruce McElhone, Frank Summer-skill, Hn. Dr. Shirley
Driberg, Tom McGuire, Michael Swain, Thomas
Dunnett, Jack Mackenzie, Gregor Taverne, Dick
Eadie, Alex Mackie, John Thomas, Jeffrey (Abertillery)
Edwards, Robert (Bilston) Mackintosh, John P. Thomson, Rt. Hn. G. (Dundee, E.)
Edwards, William (Merioneth) Maclennan, Robert Tinn, James
Ellis, Tom McMillan, Tom (Glasgow, C.) Tomney, Frank
English, Michael Mahon, Simon (Bootle) Torney, Tom
Evans, Fred Mallalieu, J. P. W. (Huddersfield, E.) Tuck, Raphael
Fernyhough, Rt. Hn. E.
Fletcher, Raymond (Ilkeston) Marks, Kenneth Varley, Eric G.
Foot, Michael Marquand, David Wainwright, Edwin
Ford, Ben Marsden, F. Walden, Brian (B'm'ham, All Saints)
Forrester, John Mason, Rt. Hn. Roy Walker, Harold (Doncaster)
Fraser, John (Norwood) Mayhew, Christopher Watkins, David
Freeson, Reginald Meacher, Michael Weitzman, David
Galpern, Sir Myer Mellish, Rt. Hn. Robert Wells, William (Walsall, N.)
Gilbert, Dr. John Mendeison, John White, James (Glasgow, Pollok)
Golding, John Mikardo, Ian Whitehead, Phillip
Gordon Walker, Rt. Hn. P. C. Millan, Bruce Willey, Rt. Hn. Frederick
Grant, George (Morpeth) Milne, Edward (Blyth) Williams, Alan (Swansea, W.)
Grant, John D. (Islington, E.) Molloy, William Williams, W. T. (Warrington)
Griffiths, Eddie (Brightside) Morgan, Elystan (Cardiganshire) Wilson, Alexander (Hamilton)
Gunter, Rt. Hn. R. J Morris, Alfred (Wythenshawe) Woof, Robert
Hamilton, William (Fife, W.) Mulley, Rt. Hn. Frederick
Hamling, William Murray, Ronald King TELLERS FOR THE NOES:
Hannan, William (G'gow, Maryhill) Ogden, Eric Mr. Donald Coleman and
Hardy, Peter O'Halloran, Michael Mr. Alan Fitch.
Harper, Joseph

Main Question, as amended, put.—

The House divided: Ayes 271, Noes 223.

Division No. 372] AYES [10.13 p.m.
Adley, Robert Fox, Marcus McNair-Wilson, Michael
Alison, Michael (Barkston Ash) Fraser, Rt. Hn. Hugh (St'fford & Stone) McNair-Wilson, Patrick (NewForest)
Alison, James (Hemel Hempstead) Fry, Peter Maddan, Martin
Amery, Rt. Hn. Julian Galbraith, Hn, T. G. Madel, David
Archer, Jeffrey (Louth) Gardner, Edward Maginnis, John E.
Astor, John Gibson-Watt, David Marples, Rt. Hn. Ernest
Atkins, Humphrey Gilmour, Sir John (Fife, E.) Marten, Neil
Awdry, Daniel Glyn, Dr. Alan Mather, Carol
Baker, Kenneth (St. Marylebone) Godber, Rt. Hn. J. B. Maude, Angus
Baker, W. H. K. (Banff) Goodhew, Victor Maudling, Rt. Hn. Reginald
Barber, Rt. Hn. Anthony Gorst, John Mawby, Ray
Batsford, Brian Gower, Raymond Maxwell-Hyslop, R. J.
Beamish, Col. Sir Tufton Gray, Hamish Meyer, Sir Anthony
Bell, Ronald Green, Alan Mills, Peter (Torrington)
Benyon, W. Griffiths, Eldon (Bury St. Edmunds) Mills, Stratton (Belfast, N.)
Biffen, John Grimond, Rt. Hn. J. Mitchell, Lt -Col. C. (Aberdeenshire, W.)
Biggs-Davison, John Grylls, Michael Mitchell, David (Basingstoke)
Boardman, Tom (Leicester, S. W.) Gummer, Selwyn Moate, Roger
Body, Richard Gurden, Harold Molyneaux, James
Boscawen, Robert Hall, Miss Joan (Keighley) Money, Ernie
Bossom, Sir Clive Hall, John (Wycombe) Morgan, Geraint (Denbigh)
Bowden, Andrew Hall-Davis, A. G. F. Morrison, Charles (Devizes)
Boyd-Carpenter, Rt. Hn. John Hamilton, Michael (Salisbury) Mudd, David
Braine, Bernard Hannam, John (Exeter) Murton, Oscar
Bray, Ronald Harrison, Brian (Maldon) Neave, Airey
Brewis, John Haselhurst, Alan Nicholls, Sir Harmar
Brinton, Sir Tatton Havers, Michael Noble, Rt. Hn. Michael
Brocklebank-Fowler, Christopher Hawkins, Paul Normanton, Tom
Brown, Sir Edward (Bath) Hay, John Nott, John
Bruce-Gardyne, J. Heseltine, Michael Onslow, Cranley
Buchanan-Smith, Alick (Angus, N&M) Hicks, Robert Orr, Capt. L. P. S.
Buck, Antony Higgins, Terence L. Osborn, John
Bullus, Sir Eric Hiley, Joseph Owen, Idris (Stockport, N.)
Burden, F. A. Hill, John E. B. (Norfolk, S.) Page, Graham (Crosby)
Campbell, Rt. Hn. G. (Moray & Nairn) Holland, Philip Page, John (Harrow, W.)
Carlisle, Mark Hordern, Peter Parkinson, Cecil (Enfield, W.)
Channon, Paul Hornby, Richard Percival, Ian
Chapman, Sydney Hornsby-Smith. Rt. Hn. Dame Patricia Peyton, Rt. Hn. John
Chichester-Clark, R. Howe, Hn. Sir Geoffrey (Reigate) Pink, R. Bonner
Churchill, W. S. Howell, David (Guildford) Pounder, Rafton
Clark, William (Surrey, E.) Howell, Ralph (Norfolk, N.) Powell, Rt. Hn. J. Enoch
Clarke, Kenneth (Rushcliffe) Hunt, John Price, David (Eastleigh)
Clegg, Walter Hutchison, Michael Clark Proudfoot, Wilfred
Cockeram, Eric Iremonger, T. L. Quennell, Miss J. M.
Cooke, Robert James, David Raison, Timothy
Coombs, Derek Jenkin, Patrick (Woodford) Redmond, Robert
Cooper, A. E. Jennings, J. C. (Burton) Reed, Laurance (Bolton, E.)
Cordle, John Jessel, Toby Rees, Peter (Dover)
Corfield, Rt. Hn. Frederick Johnson Smith, G. (E. Grinstead) Rees-Davies, W. R.
Cormack, Patrick Jones, Arthur (Northants, S.) Renton, Rt. Hn. Sir David
Costain, A. P. Jopling, Michael Rhys Williams, Sir Brandon
Critchley, Julian Joseph, Rt. Hn. Sir Keith Ridley, Hn. Nicholas
Crouch, David Kellett, Mrs. Elaine Ridsdale, Julian
Crowder, F. P. Kershaw, Anthony Roberts, Wyn (Conway)
Curran, Charles Kilfedder, James Rodgers, Sir John (Sevenoaks)
Davies, Rt. Hn. John (Knutsford) Kimball, Marcus Rossi, Hugh (Hornsey)
d'Avigdor-Goldsmid, Sir Henry King, Evelyn (Dorset, S.) Rost, Peter
d'Avigdor-Goldsmid, Maj.-Gen. James King, Tom (Bridgwater) Royle, Anthony
Dean, Paul Kinsey, J. R. Russell, Sir Ronald
Deedes, Rt. Hn. W. F. Kirk, Peter Scott-Hopkins, James
Digby, Simon Wingfield Knight, Mrs. Jill Sharples, Richard
Dixon, Piers Knox, David Shaw, Michael (Sc'b'gh & Whitby)
Douglas-Home, Rt. Hn. Sir Alec Lambton, Antony Shelton, William (Clapham)
Drayson, G. B. Lane, David Simeons, Charles
Dykes, Hugh Langford-Holt, Sir John Sinclair, Sir George
Eden, Sir John Legge-Bourke, Sir Harry Skeet, T. H. H.
Elliot, Capt. Walter (Carshalton) Le Marchant, Spencer Smith, Dudley (W'wick & L'mington)
Elliott, R. W. (N'c'tle-upon-Tyne. N.) Lewis, Kenneth (Rutland) Soref, Harold
Eyre, Reginald Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield) Speed, Keith
Farr, John Longden, Gilbert Spence, John
Fenner, Mrs. Peggy Loveridge, John Sproat, lain
Fidler, Michael Luce, R. N. Stainton, Keith
Finsberg, Geoffrey (Hampstead) McAdden, Sir Stephen Stanbrook, Ivor
Fisher, Nigel (Surbiton) MacArthur, Ian Steel, David
Fletcher-Cooke, Charles McCrindle, R. A. Stewart-Smith, D. G. (Belper)
Fookes, Miss Janet McLaren, Martin Stodart, Anthony (Edinburgh, W.)
Fortescue, Tim Maclean, Sir Fitzroy Stoddart-Scott, Col. Sir M.
Fowler, Norman Macmillan, Maurice (Farnham) Stokes, John
Stuttaford, Dr. Tom Tugendhat, Christopher Wiggin, Jerry
Sutcliffe, John Turton, Rt. Hn. R. H. Wilkinson, John
Taylor, Sir Charles (Eastbourne) van Straubenzee, W. n. Wolrige-Gordon, Patrick
Taylor, Edward M. (G'gow, Cathcart) Vaughan, Dr. Gerard Wood, Rt. Hn. Richard
Taylor, Frank (Moss Side) Vickers, Dame Joan Woodhouse, Hn. Christopher
Tebbit, Norman Waddington, David Woodnutt, Mark
Temple, John M. Walder, David (Clitheroe) Worsley, Marcus
Thatcher, Rt. Hn. Mrs. Margaret Walker-Smith, Rt. Hn. Sir Derek Wylie, Rt. Hn. N. R.
Thomas, John Strattling (Monmouth) Walters, Dennis Younger, Hn. George
Thompson, Sir Richard (Croydon, S.) Ward, Dame Irene
Thorpe, Rt. Hn. Jeremy Warren, Kenneth TELLERS FOR THE AYES:
Tilney, John Weatherill, Bernard Mr. Jasper More and
Trafford, Dr. Anthony White, Roger (Gravesend) Mr. Hector Monro.
Trew, Peter Whitelaw, Rt. Hn. William
Abse, Leo Golding, John Mahon, Simon (Bootle)
Albu, Austen Gordon Walker, Rt. Hn P. C. Mallalieu, J. P. W. (Huddersfield, E.)
Allaun, Frank (Salford, E.) Grant, George (Morpeth) Marks, Kenneth
Archer, Peter (Rowley Regis) Grant, John D. (Islington, E.) Marquand, David
Armstrong, Ernest Griffiths, Eddie (Brightside) Marsden, F.
Ashton, Joe Gunter, Rt. Hn R. J. Mason, Rt. Hn. Roy
Atkinson, Norman Hamilton, William (Fife, W.) Mayhew, Christopher
Bagier, Gordon A. T. Hamling, William Meacher, Michael
Barnett, Joel Hannan, William (G'gow, Maryhill) Mellish, Rt. Hn. Robert
Beaney, Alan Hardy, Peter Mendelson, John
Bennett, James (Glasgow, Bridgeton) Harper, Joseph Mikardo, Ian
Bidwell, Sydney Harrison, Walter (Wakefield) Millan, Bruce
Blenkinsop, Arthur Hart, Rt. Hn. Judith Milne, Edward (Blyth)
Boardman, H. (Leigh) Heffer, Eric S. Molloy, William
Booth, Albert Horam, John Morgan, Elystan (Cardiganshire)
Boyden, James (Bishop Auckland) Houghton, Rt. Hn. Douglas Morris, Alfred (Wythenshawe)
Bradley, Tom Huckfield, Leslie Mulley, Rt. Hn. Frederick
Brown, Hugh D. (G'gow, Provan) Hughes, Rt. Hn. Cledwyn (Anglesey) Murray, Ronald King
Brown, Ronald (Shoreditch & F'bury) Hughes, Mark (Durham) Ogden, Eric
Buchan, Norman Hughes, Robert (Aberdeen, N.) O'Halloran, Michael
Buchanan, Richard (G'gow, Sp'burn) Hughes, Roy (Newport) O'Malley, Brian
Butler, Mrs. Joyce (Wood Green) Hunter, Adam Oram, Bert
Callaghan, Rt. Hn. James Irvine, Rt. Hn. Sir Arthur (Edge Hill) Orbach, Maurice
Campbell, I. (Dunbartonshire, W.) Janner, Greville Orme, Stanley
Carmichael, Neil Jay, Rt. Hn. Douglas Oswald, Thomas
Carter-Jones, Lewis (Eccles) Jeger, Mrs. Lena (H'b'n & St. P' cras, S.) Owen, Dr. David (Plymouth, Sutton)
Castle, Rt. Hn. Barbara Jenkins, Hugh (Putney) Paget, R. T.
Clark, David (Colne Valley) Jenkins, Rt. Hn. Roy (Stechford) Palmer, Arthur
Concannon, J. D. John, Brynmor Pannell, Rt. Hn. Charles
Conlan, Bernard Johnson, Carol (Lewisham, S.) Parker, John (Dagenham)
Corbet, Mrs. Freda Johnson, James (K'ston-on-Hull, W.) Parry, Robert (Liverpool, Exchange)
Cox, Thomas (Wandsworth, C.) Jones, Barry (Flint, E.) Pavitt, Laurie
Crawshaw, Richard Jones, Dan (Burnley) Peart, Rt. Hn. Fred
Cronin, John Jones, Rt. Hn. Sir Elwyn (W. Ham, S.) Pentland, Norman
Crossman, Rt. Hn. Richard Jones, Gwynoro (Carmarthen) Prentice, Rt. Hn. Reg.
Dalyell, Tam Jones, T. Alec (Rhondda, W.) Price, J. T. (Westhoughton)
Darling, Rt. Hn. George Judd, Frank Price, William (Rugby)
Davidson, Arthur Kaufman, Gerald Probert, Arthur
Davies, Denzil (Llanelly) Kelley, Richard Rankin, John
Davies, G. Elfed (Rhondda, E.) Kerr, Russell Reed, D. (Sedgefield)
Davies, Ifor (Gower) Kinnock, Neil Rees, Merlyn (Leeds, S.)
Davis, Clinton (Hackney, C.) Lambie, David Rhodes, Geoffrey
Deakins, Eric Lamond, James Richard, Ivor
Delargy, H. J. Latham, Arthur Roberts, Albert (Normanton)
Dell, Rt. Hn. Edmund Lawson, George Roberts. Rt. Hn. Goronwy (Caernarvon)
Dempsey, James Leadbitter, Ted Robertson, John (Paisley)
Doig, Peter Lee, Rt. Hn. Frederick Roderick, Caerwyn E. (Br'c'n & R'dnor)
Douglas, Dick (Stirlingshire, E.) Leonard, Dick Roper, John
Douglas-Mann, Bruce Lestor, Miss Joan Rose, Paul B.
Driberg, Tom Lever, Rt. Hn. Harold Ross, Rt. Hn. William (Kilmarnock)
Dunnett, Jack Lewis, Arthur (W. Ham N.) Sheldon, Robert (Ashton-under-Lyne)
Eadie, Alex Lewis, Ron (Carlisle) Shore, Rt. Hn. Peter (Stepney)
Edwards, Robert (Bilston) Lipton, Marcus Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Edwards, William (Merioneth) Loughlin, Charles Short, Mrs. Renée (W'hampton, N. E.)
Ellis, Tom Lyon, Alexander W. (York) Silkin, Rt. Hn. John (Deptford)
English, Michael Lyons, Edward (Bradford, E.) Silkin, Hn. S. C. (Dulwich)
Evans, Fred Mabon, Dr. J. Dickson Sillars, James
Fernyhough, Rt. Hn. E. McBride, Neil Silverman, Julius
Fletcher, Raymond (Ilkeston) McCartney, Hugh Skinner, Dennis
Foot, Michael McElhone, Frank Small, William
Ford, Ben McGuire, Michael Smith, John (Lanarkshire, N.)
Forrester, John Mackenzie, Gregor Spearing, Nigel
Fraser, John (Norwood) Mackie, John Spriggs, Leslie
Freeson, Reginald Mackintosh, John P. Stallard, A. W.
Galpern, Sir Myer Maclennan, Robert Stoddart, David (Swindon)
Gilbert, Dr. John McMillan, Tom (Glasgow, C.) Stonehouse, Rt. Hn. John
Strang, Gavin Tuck, Raphael Willey, Rt. Hn. Frederick
Strauss, Rt. Hn. G. R. Varley, Eric G. Williams, Alan (Swansea, W.)
Summerskill, Hn. Dr. Shirley Wainwright, Edwin Williams, W. T. (Warrington)
Swain, Thomas Walden, Brian (B'm'ham, All Saints) Wilson, Alexander (Hamilton)
Taverne, Dick Walker, Harold (Doncaster) Woof, Robert
Thomas, Jeffrey (Abertillery) Watkins, David
Thomson, Rt. Hn. G. (Dundee, E.) Weitzman, David TELLERS FOR THE NOES:
Tinn, James Wells, William (Walsall, N.) Mr. Donald Coleman and
Tomney, Frank White, James (Glasgow, Pollok) Mr. Alan Fitch.
Torney, Tom Whitehead, Phillip

Resolved, That this House endorses Her Majesty's Government's decision to undertake thorough- going reviews of the financial performance of the British Steel Corporation and of the structure and future development of the British Steel Industry.

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