HC Deb 21 December 1972 vol 848 cc1576-96
The Secretary of State for Trade and Industry (Mr. Peter Walker)

With permission, Mr. Speaker, I wish to make a statement on the modernisation programme of the British Steel Corporation. I have reached agreement with the corporation on a strategy for the major modernisation of British steel production over the next 10 years. It will require a programme of investment of £3,000 million to provide for modernisation and expansion—by far the biggest carried out in the history of the British steel industry.

The object of the strategy is to create an efficient, profitable, modern industry able to compete with the rest of the world and able to assure future employment. It involves a major development of the five main heritage sites and of special steel plants in the Sheffield-Rotherham area and the development of a major new steel complex. The effects on the major steel-producing regions will be as follows:— In Wales, a major development to 6 million tonnes at Port Talbot in addition to the current expansion at Llanwern. This should assure the future of the Welsh tinplate industry. Steelmaking and hot-rolling at Shotton will continue till towards the end of the 1970s and finishing processes will continue thereafter. Wales will have nearly 30 per cent. of the total investment under the strategy, an investment approaching £900 million. Steel production in Wales will be increased to about 10 million tonnes. The future of East Moors and Brymbo are the subject of continuing discussion between the BSC and GKN.

In Scotland, the heritage site at Ravenscraig is already being expanded. It will be further expanded during the period to 3.2 million tonnes steelmaking capacity. The corporation will also install new electric are steel making of up to 1 million tonnes. This is likely to be at Hallside, and supported at some stage by a new direct reduced pellet plant, probably at Hunterston. Thus, by the end of the period covered by the strategy total steel production in Scotland will be increased to about 4½ million tonnes. Finishing processes will continue at many of the present Scottish works, including Glengarnock, and will provide the wide range of products which are so important to the Scottish steel using industries.

In the North-East, there will be a substantial increase in output from the heritage site at Lackenby and the development of a major new steel complex on the south bank of the Tees. This complex will be developed in two phases each of about 3½ million tonnes capacity. The new works will be adjacent to the existing Lackenby works and their combined capacity would ultimately exceed 12 million tonnes.

In Yorkshire-Humberside, there will be a substantial increase in output from the Anchor development on the heritage site at Scunthorpe. In the Sheffield-Rotherham area capacity for stainless and alloy steelmaking and rolling will be modernised and expanded.

The five heritage plants and the new Teesside works are expected eventually to provide the whole of the corporation's bulk steelmaking apart from certain electric are furnaces. For some years steelmaking will also continue at other centres. The existing finishing plants at a number of these centres will continue for the foreseeable future.

It is vital that there should be flexibility to adjust plans to changing circumstances and we have agreed with the British Steel Corporation guidelines under which we shall be able to regulate the timing of the major projects. Decisions as to timing will, of course, depend on the pattern of competition, demand and prices, and on the changing efficiencies of particular plants. This strategy should enable employment in the industry to be maintained at a higher level and with far greater security than would otherwise have been possible.

It will, however, in a number of areas mean a loss of jobs over the decade.

Since the nationalisation of the steel industry the BSC has cut its manpower by 27,000, and future measures resulting in a further reduction of 20,000 have already been announced. Under the proposed strategy of modernisation, manpower would fall by another 30,000 by the end of the decade.

But it is only by modernisation that we can secure the 180,000 jobs thus remaining in the BSC. Moreover, the investment required by the programme will sustain and create a large number of jobs, possibly as many as 75,000. These will principally be in the heavy electrical mechanical and civil engineering industries. It will also give British plant manufacturers a domestic market which will be a good base for export opportunities.

The Government are particularly concerned about the impact on a number of communities where steel has been the dominant industry and intend to work closely together with the corporation and the trades unions concerned so as to minimise the social consequences in these localities. The fullest use will be made of the Industry Act and the advance factory programme, and there will be a concerted inter-departmental effort to assist in providing new job opportunities.

British industry requires steel of high quality at competitive prices to ensure its own contribution to growth at home, to benefit from the Common Market opportunities and to participate in expanding world trade. A modernised British steel industry will make a vital contribution to this. This strategy will give management and men, with their great tradition and skills, the opportunity to win for the industry its share of the expanding steel market and to assure Britain's continuing place among the major steel producers of Europe and the world.

A White Paper will be published as soon as possible setting out these proposals.

Mr. Varley

Is the right hon. Gentleman aware that his statement has concealed many of the true facts, especially on redundancies? Will he confirm that what he has just announced is 50,000 additional redundancies in the steel industry over the next seven years and that that is the full measure of it? Why cannot he be more precise? Why cannot he tell us which areas will be affected and what will happen in Shotton, Shelton, Consett, East Moors, Corby and the rest? The people in these communities are entitled to know exactly what the future holds for them.

Is the Secretary of State further aware that his statement comes after 21 years of harassment and humiliation of the British Steel Corporation and that valuable time has been lost? The vague assurances the right hon. Gentleman has given on flexibility are not sufficient and we want to know much more about it. Will he tell us, for example, what will be the total tonnage of steel by the end of this decade. It apparently falls far short of the original BSC development plan which his predecessor announced to the House on 18th March 1971, in which the target was 35 million tonnes by 1975 and 43 million tonnes by 1980. The Government have knocked the BSC down from those levels.

What economic growth is envisaged under the plan and what will be the level of exports? Will the right hon. Gentleman say more about the 75,000 jobs to be sustained and created? How many new jobs will there be and what guarantees are there that they will be in traditional steel-making areas? It is no good the Prime Minister shaking his head. The people in the steel communities want to know this. For them to have to rely upon vague assurances about the use of the Industry Act over this period is insufficient. We want to know about the specific projects for specific areas. Surely, after 2½ years, the Government are not totally unprepared?

As the plan announced by the Secretary of State falls far short of the original development plan announced by the BSC, we hope that the White Paper will be published as quickly as possible, and we shall want to debate it as soon as the House re-assembles after Christmas.

Mr. Walker

We must get the question of redundancies into the right perspective. My statement contains the facts as they are known to the Government. Since nationalisation, manpower has dropped by 27,000, and prior to this strategy being approved the British Steel Corporation had given notice of a further reduction of 22,000 jobs. In addition, there will be a further 30,000 to go. Nothing has been concealed about this. It will help the Opposition to get this into perspective if they realise that in the six years of Labour Government it was a case not of 30,000 being affected but of a reduction of 404,000 jobs.

It is quite impossible in a statement to give details of individual plants and that is why the Government have decided to publish a White Paper which will set out in full the arguments for the reductions.

The hon. Gentleman failed to mention the massive advantages which will accrue to a whole range of areas from the substantial expansion and modernisation programme I have announced today which, in total, dwarfs anything conceived by the previous Government. On the question of delay, the BSC submitted its proposals to us in October. Those proposals were carefully considered and the announcement accepting the strategy has been made today.

As to tonnage, if one decides that it is sensible, as I believe it is, to have a degree of flexibility to take account of world conditions, it would be wrong to set a tonnage deadline for a specific date. Under this strategy it is likely that by 1980 production will be of the order of 33 million tonnes in the nationalised sector. Already, the private sector is producing 3 million tonnes. The strategy will enable us through the 1980s to go quickly to a production figure of 38 million tonnes. I suggest that the House should compare this with the six years of the previous Administration when steel production went up from 27 million tonnes to 28 million tonnes in six years. There is quite a difference in performance.

As to the 75,000 jobs created by the expansion programme, they are likely to be in the centres concerned. I agree that they will not necessarily be jobs in the areas primarily connected with steel manufacturing but jobs will be provided in the heavy electrical industry, and many development areas are concerned with the heavy electrical industry.

Several Hon. Members


Mr. Speaker

Order. I ask for the help of the House. Any time spent on the statement takes time out of the debate on coal in which many hon. Members wish to speak. I can see that about 30 right hon. and hon. Members want to ask supplementary questions. So I appeal for brevity.

Sir R. Cary

Does my right hon. Friend's statement mean that the North-Western area, the home of the Industrial Revolution, with its great industrial strength, will be denied any steel-making capacity of its own? If that is so under rationalisation, it means that a degree of misery and unhappiness will be brought to many steel workers and their families whom I know personally.

Mr. Walker

It does not mean that. In the North-West region the main capacity at present is in Irlam. The closure of that plant was announced in April 1971. But Irlam is a possible candidate for a mini-mill in the future.

Mr. Michael Foot

The vagueness of the right hon. Gentleman's statement is illustrated by the fact that he has not referred to Ebbw Vale. The BSC proposals if carried through would be a catastrophe of the first order for Ebbw Vale, and the whole life of the community would be shattered. Will the right hon. Gentleman give a clear undertaking that he will not sanction or approve the proposals for Ebbw Vale until they have been examined on the spot or, if the worst comes to the worst, until both he and the Government have given an absolute assurance of alternative employment to make up for the jobs lost?

Have the Government now abandoned the 28-million tonne target which was first introduced into these discussions by them? If they are prepared to abandon that target, why should they not now return to the full 42-million or 43-million tonne target accepted by the Labour Government?

Mr. Walker

The one target the Labour Government actually committed themselves to was, in 1965, to increase steel production by nearly 4 million tonnes. At that time there was a publication called the National Plan which said that steel production would rise by 34 million tonnes. In fact, it rose by 1 million tonnes during that period.

As the hon. Gentleman will know, the announcement that steel making would not continue in Ebbw Vale was made three months before the June 1970 General Election, in the time of his Government. The Labour Government said in March 1970 that steelmaking would stop in Ebbw Vale. At present the corporation and the unions are examining the basis upon which the corporation has decided upon the closure. The decision for closure of any specific plant is a matter for the corporation under the Statute that the Labour Government put into operation.

The possibility of attracting other industries to Ebbw Vale is linked with the provision of cheap steel plate from Port Talbot which will be of great consequence and importance to Ebbw Vale.

Dame Irene Ward

Although I am unable at this stage to comment on what is to happen in the North-East, may I express my confidence that my right hon. Friend will do everything he can to make the iron and steel industry a competitive one in Britain?

Will the Government bear in mind the immense anxiety that a statement of this kind must create in the minds of ordinary people connected with the steel industry who do not know what their future will hold? Will my right hon. Friend give an assurance that before any time has passed their anxiety will be dealt with? I am sure that my right hon. Friend, with his very sympathetic knowledge of industrial relations, will bear in mind that men and their families cannot be expected to take all the top strategy without knowing how it will affect their jobs.

Mr. Walker

I am grateful to my hon. Friend for her comments. Besides having a massive injection of investment, a very substantial increase in steel production, and the creation of a large number of jobs, the North-East is also involved in the types of industry which are concerned with the investment programme. The representations I have received from both sides about the possible strategy and its effects on the North-East lead me to believe that there will be considerable pleasure at its announcement.

As for the effect of the strategy on plants which will be replaced by the new, modern plants, the advantage is that the corporation will be able four or five years ahead to discuss with the unions and the Government any future closures that might be involved. This will enable us to set up the appropriate inter-departmental organisation and to secure the full use of the advance factory procedure and the Industry Act in an effort to minimise the human problems involved in such changes.

Mr. Eadie

In what way will the White Paper deal with the effect of our entry into the Common Market on the Government's proposals? Is the right hon. Gentleman aware that many development areas are job hungry and as a consequence of this statement will be even hungrier for jobs? Some of them will regard the statement not as a statement on steel but as a memorial to the steel industry in areas where they are trying to find employment.

Mr. Walker

I have discussed the potential effect of the strategy on Scotland with many people connected with Scotland, including Scottish Labour Members. I do not believe that the announcement that in future Scotland will increase its production of steel to 4½ million tonnes in modern plant and will benefit from a major injection of capital investment will be greeted by anybody other than those with a political bias except with complete rejoicing.

Mr. Skeet

Is my right hon. Friend aware that the majority of the British people will support his idea of putting new technology into the industry, namely, LD furnaces, electric are furnaces, and direct reduction methods, and that time is against Britain unless it is prepared to bring them in fairly quickly? Will he orient the detail of his proposals on Europe?

Mr. Walker

The tragedy has been over the past decade that when other countries were going ahead with modernisation investment in the British steel industry was virtually static. We had six years of Labour Government. Alas, the Labour Government were much more interested in nationalisation than in modernisation. It is only now that we can begin to catch up.

Sir G. de Freitas

The Secretary of State has not mentioned the future of Corby. Does he realise that over 80 per cent. of the male manual workers in Corby are employed in steel? Will the Government, whatever happens, encourage diversification of industry by allowing industrial development certificates for new firms which seek to establish themselves?

Mr. Walker

Steelmaking is likely to continue for the rest of the decade in Corby. In the corporation's view, Corby has an assured long-term future as a major tube-making plant. If a locality is likely to be affected by strategies such as this, that will be a matter which will be carefully considered as regards granting industrial development certificates.

Mr. Grimond

So that we may judge the full effect of this strategy upon the Scottish economy, will the Secretary of State say what share Scotland will have in the £3,000 million investment plan, what the effect on employment is likely to be, and when, if ever, the Hunterston pellet-making plant is likely to start?

Mr. Walker

I cannot put a date to the last question. It is a matter for the corporation's judgment. Investment in Scotland is likely to be about £400 million. Obviously there are likely to be increased job opportunities at Ravenscraig and Hallside.

Mr. Crouch

I warmly welcome my right hon. Friend's obvious enthusiasm for modernisation of this industry, which is Corby. In the Corporation's view, Corby basic to our economy. However, I am concerned lest his enthusiasm for modernisation leads him to put something less than top priority to the absolute essential of good communication and consultation if the contraction element of the industry is to be properly handled.

Mr. Walker

I agree. The advantage of such a strategy is that we have four or five years for each locality affected to make an excellent plan for tackling these problems.

Mr. John Mendelson

May I ask the Secretary of State whether he is prepared to address himself not so much to the general propaganda that he is enunciating as to the detailed implications of his statement. He will know that those who work in steel have accepted and now accept the aim of a modernised industry and that he has no need to erect any Aunt Sallies about that one. He will also know that that agreement has always been attached to two conditions which the unions have expressed to every Government—that there must be the creation of an equal number of jobs as near as possible in the industry; and that the development must take place pari passu, side by side, and the Government must commit themselves to spending money to keep works open and allow production to continue until new jobs have been created. It is the Secreary of State's task today to give assurance to those who represent steel workers.

Mr. Walker

It is only by agreeing a long-term strategy for modernisation that one can ensure that the human problem—that of the replacement of jobs—is tackled effectively. If we had gone on without a strategy of this nature, one works after another would have been knocked out because of its complete failure to compete with other steel firms throughout the world. I assure the hon. Gentlemen that the Government intend in their long-term plan to replace the jobs concerned.

Sir F. Maclean

Is my right hon. Friend aware of the satisfaction he will give in Scotland by the announcement of this substantial expansion of the productive capacity in the steel industry and by the numerous new jobs which will be created in associated industries? Will he do something which he is doubtless well qualified to do when arriving at any decision about Hunterston, namely, bear in mind the important environmental considerations involved?

Mr. Walker

I am grateful for what my hon. Friend said in his first question. The latter question will be a matter for my right hon. Friend the Secretary of State for Scotland, who I know will bear these matters very much in mind.

Mr. Eddie Griffiths

May I give a broad welcome to the theme of the Secretary of State's statement. By quick arithmetic I calculate that by 1980 we shall have capacity of 35 million ingot tonnes modern capacity, plus a further 12 million tonnes of obsolete and openhearth steelmaking capacity. If 4 million tonnes to 5 million tonnes of this were kept open it would give us the 40 million tonnes total that the Opposition have been seeking. I criticise the Government for not going a little further and authorising a further 5 million ingot tonnes of modern capacity which would have put us on a par with Western Germany.

In view of the statement, and as the British Steel Corporation planning, both in broad terms and in detail, has been vindicated, will the right hon. Gentleman confirm that scrutinising bodies under the chairmanship of civil servants will never again look at the steel industry? Will he agree that the corporation has been completely vindicated?

On the serious question of those areas such as Irlam where steelmaking is to stop, will he explain what firm ideas he has for attracting suitable alternative industries to employ the redundant steel workers? Among these proposals will he include something to allow the BSC to diversify its activity both on its own and in joint ventures with private concerns to take industry to the traditional steel areas?

Mr. Walker

On the point about the general relationship between the Government and the BSC over this strategy, we have agreed a guideline procedure with the chairman of the BSC which will result in the Government being able quickly to know the facts upon which important decisions of strategy are to be taken but without the detailed interference in management which has been so time consuming in the past.

As for providing other jobs, the task involved here must vary from locality to locality and upon this will depend the nature of the diversity which can be provided. Any community which is substantially affected will have at its behest a cross section of all Government Departments which will, years before the closure, find the best way of diversifying industry in that area.

Mr. Ian Lloyd

The pattern of technical development and the pattern of its location are obviously crucial to the capacity of the British steel industry to meet the growing costs and its competitors and therefore to guarantee employment. Will my right hon. Friend say a little more about the £3,000 million? Is it £3,000 million at today's prices or will it be £300 million a year over the next decade?

Mr. Walker

It will be £3,000 million at 1972 prices.

Mr. Barry Jones

The Secretary of State has passed a death sentence on 7,200 jobs at the Shotton Works. Has he any idea of the calamitous consequences of such an appalling scale of redundancy for the steel town of Shotton, for the whole economy of North Wales and for the economy of North-West England as well? What hope can he give me for my constituents and for the whole area that they will not be murdered on the altar of accountancy?

Mr. Walker

I am very well aware of the potential social problems for a community such as Shotton, which is so dependent upon steel. I know the way in which the hon. Member has actively put the case for his constituency and has put forward the problems of Shotton both to myself and to the Government as a whole. At Shotton it is not expected that steelmaking will stop before the latter part of the decade and it will involve 6,000 jobs. The rest of the processing will continue there. I realise that this is a substantial proportion of the labour force, but I can assure him that if we had decided, as I know he was advocating, to modernise Shotton it would have cost a substantial figure—3,000 jobs would have been lost in any case—and it would not have been anywhere near as competitive as, for example, the major development at Port Talbot. It was because there was no long-term future for steelmaking at the inland site at Shotton that the decision was taken.

I can assure the hon. Member that it is the intention of my Department and of other Government Departments quickly to recognise the serious problem which will arise in five or six years time for Shotton and to use every method available to the Government—the Industry Act, advance factories, and so on—to see that the problem is tackled.

Sir A. Meyer

Many people in North Wales consider that had Summers remained in private ownership it would have modernised its steelmaking capacity. Will my right hon. Friend give urgent consideration to asking the Secretary of State for the Environment to grant special development area status to Flintshire?

Mr. Walker

I can assure my hon. Friend that we shall be discussing the problems of areas such as Shotton and that we shall be considering every way in which we can help.

Mr. Bottomley

Several times the Secretary of State referred to the six years of Labour Government. But does he not realise that major responsibility for the weakness of the steel industry rests with his Conservative predecessors, first because of denationalisation and, secondly, because of the division of the strip mill capacity between Wales and Scotland which contributed to the inefficiency of the industry. The Secretary of State said that the statement made today had been agreed with the BSC. Was the agreement as a result of compromise or is the strategy based upon the original proposition of the BSC?

Mr. Walker

It is certainly not the case that the BSC compromised. Obviously, during the period of consideration there has been a dialogue between the Government and the corporation. I am certain that the BSC will agree that this is the strategy that it wished to pursue.

Mr. MacArthur

Will my right hon. Friend confirm that this will be the largest-ever investment in the Scottish steel industry and that it will provide it with a firm, secure and modern base for the future? Will he confirm that his statement today means that Scotland's steel-producing capacity will increase by 28 per cent. and that at Ravenscraig the increase will be by one-third? Can he give us an estimate today of the number of new jobs that are likely to be created in ancillary industries as a result of the statement?

Mr. Walker

I can confirm the various propositions put to me by my hon. Friend. The BSC and the Government were well aware of the importance of increasing steel capacity in Scotland, not just because of the direct effect on the industry itself but because of the opportunity of attracting a wide diversity of industries to take advantage of it. It was on that basis that we agreed the strategy.

Mr. Gregor Mackenzie

Thousands of jobs are involved in this matter. I am concerned with the special steels division of the industry. What is to be the future of special steels production in Scotland? What will be the level of production there and how many jobs will be lost?

Mr. Walker

I am unable to give specific answers to the hon. Member's points but I shall let him know.

Mr. Rost

The statement will bring fresh encouragement to the steel industry and to the nation's economy generally. In view of that, will my right hon. Friend explain why the Labour Party, which nationalised the industry and then watched it become obsolete and unprofitable, is now opposed to a realistic modernisation programme which will bring security and prosperity?

Mr. Walker

Alas, it is certainly true that in recent years the steel industry has lagged far behind its competitors abroad. It has, however, started to pick up over the last two years and as a result of the programme I have announced we shall be able to produce one of the finest steel industries in the world.

Mr. David Watkins

The Secretary of State has said nothing about the future of steel making at Consett where a large community is almost wholly dependent upon steel making and where any reduction in employment opportunities would be a demoralising and shattering blow. What proposals does the right hon. Gentleman have for Consett and what are the so-called massive advantages for that area?

Mr. Walker

Consett will operate as a steelmaking concern certainly until late in this decade. It is impossible to make a decision beyond that. I am advised by the BSC that it is considering Consett as a possible supplementary source of billets together with a number of other candidates.

Mr. Tinn

The decision about South Teesside, which has been long awaited and long delayed, will be warmly welcomed in the area which in recent years has lost 9,000 jobs and has been hit harder than any other. The steel workers there have a right to expect that much more will be done to provide alter- native work in the future than has been done in the past.

Mr. Walker

I am grateful for what the hon. Gentleman said. One of the difficulties in a strategy of this sort is that virtually the whole of the steel industry is situated in the development and intermediate areas. Wherever one decides that major investments are to take place, other areas are somewhat disappointed. I am pleased that Teesside will benefit considerably by this massive injection of capital and I hope that hon. Members from Teesside who have been to see me on this topic will join in that pleasure.

Mr. Cant

Is the right hon. Gentleman aware that I have just been speaking to the Chairman of the Shelton Works Action Committee and that 2,750 men at that works are bitterly disappointed that no decision has been reached about their future? In view of the fact that this is a highly profitable works, will he give £4½ million in capital investment to ensure that this total of almost 3,000 men will retain their jobs?

Mr. Ashley

It is a simple equation.

Mr. Walker

It is not a simple equation. Any decision on Shelton is a matter which must be fitted into future trends and not into the existing position. The steelmaking and continuous casting plant, because of its nature and the total strategy that is being pursued, will be closed in the course of this decade. I am advised by the corporation that Shelton is a possible site for a mini-mill.

Mr. Lawson

The right hon. Gentleman will be aware of the disappointment in Scotland over the Hunterston steel complex, but for my part I have to say that lie appears to be about to do a great deal for Lanarkshire. Will he confirm that what he said about the 1 million-tonne series of electric are furnaces in Hallside, with pelletisation at Hunterston, represents firm plans and not things which might come up in the future?

Mr. Walker

The announcements I have made today are part of the strategy for the next decade. The exact timing will depend on the conditions of demand, otherwise at certain times there would be over-capacity. This is the capacity and I can confirm the development, probably at Hallside, of a mill of 1 million tonnes capacity.

Mr. Leadbitter

The Secretary of State is right to expect a favourable response from certain areas to his announcement about the investment programme, but this does not alter the fact that we are dealing with the national interest and with the industry as a whole. I remind him that, whether he likes is or not, 50,000 people will be made redundant in the next seven years. Therefore, I am justified in pressing him on my own problem in the Hartlepools where we have the highest unemployment figure in the whole Northern region. We have 72 men and boys now out of work, wholly unemployed, for every one vacancy registered. Will it be possible for me to press the right hon. Gentleman to discuss the future of the Hartlepools works since this involves the livelihood of 5,000 men? The picture for those men, even though there is to be investment on Teesside, will be blacker than black, if the Hartlepool works is closed or if the take-up of labour from Hartlepool is not possible in the new Teesside development.

Mr. Walker

On the question of 50,000 jobs lost which was put to me by the hon. Gentleman, I would point out that that is not in any way a redundancy figure. It relates to the number of men employed in the industry. Many of those will be lost by retirement and in other ways. The figure of 50,000 for the ten-year period compares with 40,000 over the six-year period of the Labour Government. As for Teesside, the major development there has been announced and it will, both directly and indirectly, bring essential help to Hartlepools.

Mr. John Morris

I welcome the part of the statement dealing with Port Talbot. Will the Secretary of State now agree that the Government's decision earlier this year for production by 1980 within the wide bracket of 28 million tonnes and 35 million tonnes totally lacked credibility and that the Government's policy decision has now been condemned out of the right hon. Gentleman's own mouth? What evidence is there that the Government's pious hopes for bringing new industry to areas which have great need of it will prove to be any better than their futile efforts have been so far?

Mr. Walker

The "futile efforts" so far have resulted this month in the biggest fall in unemployment for 30 years. That is an encouraging start. As for South Wales, I believe that the developments at Port Talbot will not just result in important work connected with the investment programme at Port Talbot itself but will enable South Wales to attract a number of industries.

Mr. John Robertson

I congratulate the right hon. Gentleman on making a tragedy appear to be a triumph. Will he give more details about the situation in Scotland? How many steelworks will close? What will be the total number of steelworkers made redundant? What multiplier will he use to cope with the total number of unemployed as a result of closures and redundancies? Lastly, how much of the total tonnage of raw steel made will be finished in Scotland?

Mr. Walker

The hon. Gentleman asked me about the effect in Scotland of the closure of works. He will be delighted to know that as a result of today's statement there will be no further closure of any works in Scotland other than those which have already been announced in the past. I am sure that will give the hon. Gentleman great pleasure. Furthermore, developments at Hallside and Ravenscraig will result in a substantial amount of new jobs in the steel industry in those places. Therefore, in terms of steelmaking and investment this will bring new opportunities for Scottish industry.

Mr. English

Has the right hon. Gentleman's scheme been approved by the European Community? Could it be altered by that Community? I presume that he has given the House his figure of gross investment, and therefore could he tell the House what is the net investment figure in the light of his asset-stripping? Finally, when will Stanton works close, how many men will be affected, and what jobs will they be offered?

Mr. Walker

There is no necessity to obtain approval from the Community on this matter, and there will be no interference with this strategy by the Community. As for specific plans, I must inform the hon. Gentleman that he must wait for the White Paper in which we shall be outlining the overall effects for the country at large. The investment is £3,000 million, half of which comes from cash resources which will be obtained from the corporation and as to half from public funds.

Mr. Lambie

Will the right hon. Gentleman explain how the United Kingdom will remain a major world steel producer when he is giving it a target of 33 million tonnes and when for some time our main competitor, Japan, has been aiming at an annual production target of 120 million tonnes? The Secretary of State must recognise that there will be great disappointment in Scotland not to site a greenfield integrated steel unit at Hunterston. Contrary to the opinions of some of my colleagues on this side of the House, does he not appreciate that his decision today not to announce this development at Hunterston will mean, in the early 1980s, the closure of every steel-producing area in Scotland with the loss of 26,000 jobs? [HON. MEMBERS: "Rubbish."] It is not rubbish. Did the Secretary of State for Scotland offer his resignation at the Government's decision not to take the complex to Hunterston?

Mr. Walker

The House will judge for itself whether the hon. Gentleman's colleagues, who spoke a little earlier from the Scottish benches, and indeed those Scottish Members from both sides of the House who have discussed these matters with me, were right or wrong. Certainly none of those hon. Members, bearing in mind the figures which they suggested to me, will be disappointed by the statement. It is a statement which does far better for the steel industry in Scotland than anything either achieved or envisaged by the Labour Government.

Mr. Ashley

I am grateful to you, Mr. Speaker, for being so forbearing. What kind of simple conjuring trick is the Secretary of State trying to play when making a major statement on the steel industry without mentioning Shelton, which is one of the very few firms in Britain which have uneconomic equipment and yet make a profit? Does the Minister realise that with the investment of £4½ million on electrical are furnaces this one works could become a gold mine? Will the right hon. Gentleman assure us not only that he will keep this works open but that he will expand it? If he does not, North Staffordshire will be devastated.

Mr. Walker

I have said already that iron and steelmaking and the continuous casting plant will close during this decade as part of the strategy. What is involved here is the need to take into consideration the total strategy of modernising the British steel industry and the fact that inland sites cannot compete with the major developments taking place throughout the world on coastal waters. As I have said, Shelton is one of the sites being considered as possible sites for mini-mills in the future.

Mr. Ross

I hope that the Secretary of State will not underestimate the disappointment that there is in Scotland about Hunterston. Does the Secretary of State recall that a week or so ago the CBI and the STUC urged upon his Department the very much higher United Kingdom figure of 40 million tonnes and said that that was desirable on the basis of the Government's own growth rate figures, and that just this week the Scottish Council (Development Industry) produced a document urging a new development at Hunterston with an initial capacity of 3 million tonnes? The Secretary of State must not fob us off about this. Is he aware that his right hon. Friend the Secretary of State for Scotland said that it would be essential to use to the full the unique potentialities of Hunterston and that one of the Under-Secretaries of Scotland said that it would be criminal lunacy not to develop a steel industry at Hunterston? This Government stand condemned out of their own mouths by failing to reach a decision which would be to the advantage of the whole of Scotland.

Will the Secretary of State say whether the figure of 7,000 announced by the British Steel Corporation as being the number of redundancies in Scotland is the limit? Is there nothing to be added in relation to the finishing processes? In his statement, the right hon. Gentleman does not say that all the finishing processes will continue. He says that many will, but he does not say where. Hallside is already producing special steels, and Craigneuk, Hallside and Tollcross account for 5,000 jobs. How many jobs will be lost in the finishing processes? Is the right hon. Gentleman aware that since his Government took office Scotland has lost 100,000 jobs by redundancy? Any further loss and failure to repair the damage already done will be very serious.

Mr. Walker

It is tragic how the Labour Party hates receiving good news. For that sort of statement to come from the right hon. Member for Kilmarnock (Mr. Ross), who was a member of a Cabinet which allowed the British steel industry to fail to obtain the investment that it needed, it is even harder to understand, since it meant losing considerable opportunities.

As for the national objective of 42 million tonnes, the figures that I have given today show that we can be producing 38 million tonnes in the 1980s in the public sector. With the private sector at the moment already producing 3 million tonnes, a 42 million tonne figure as the national production ought to be reached as a result of this strategy.

The right hon. Gentleman asked me about Hunterston. Hunterston has unique facilities and opportunities, and my right hon. Friend the Secretary of State for Scotland is at the moment considering a whole range of planning applications for developments there. As for Hallside, I leave it to the people surrounding the locality to decide whether they are pleased with today's announcement.

Mr. Speaker

The Clerk will now proceed to read the Orders of the Day—

Mr. English

On a point of order, Mr. Speaker. The Secretary of State referred to a gross investment of £3,000 million. Obviously he wants to catch the headlines. However, he did not answer my question asking what was the net investment—

Mr. Speaker

Order. That is not a matter of order for me. It concerns the content of a ministerial answer.