HC Deb 27 June 1972 vol 839 cc1297-319
Mr. John Mendelson

I beg to move Amendment No. 457, in page 24, leave out lines 4 to 17.

The Temporary Chairman

I hope that it will be convenient to take at the same time Amendments No. 458, in page 24, leave out lines 24 and 25, and No. 459, in page 24, leave out lines 41 to 48.

Mr. Mendelson

This group of Amendments is broadly concerned with the powers of the publicly-owned coal and steel industries. The Government in the Schedule seek to repeal some of the arrangements made in various nationalisation Acts. We are opposed to any repeal of these provisions and seek to retain them.

I intend to take this opportunity to have a much wider discussion about the future of the steel industry. It will be generally agreed that this debate takes place against the background of steel-producing areas in which people are gravely concerned about certain developments which are now taking place, particularly in view of announced and actual redundancies. They are also concerned about the future operations of the publicly-owned steel and coal industries if we enter the Common Market. It would make no sense to discuss any Amendment of this kind without giving proper attention to the wider background. Therefore, we shall expect to have an answer from the Government on the broad policy questions.

This is the first opportunity—and, indeed, it will be the only opportunity under the guillotine procedure—for the Committee to have a discussion—I do not say a "proper"discussion—on this important subject. We must first consider the position in which the EEC countries find themselves. A number of guidelines have been issued by the Commission about the steel industry, and they are closely linked to its views about competition. There are at the same time a number of policy decisions and adjudications made by the Commission on regional economic aid. We must remember that one of the characteristics of a discussion of the future of coal and steel is that a good many of the plants are situated in intermediate or development areas. Therefore, there is a link between the two subjects.

Secondly, I feel that little is known in this country about the various views expressed by the Commission on the future of the steel industry and also on some aspects of regional policies. One characteristic which the coal and steel industries have in common is that technologically they are both developing industries in which the level of achievement and development is already very high and is growing daily. We are dealing not with backward industries but with industries which have a considerable future in terms of technological development. We also know that technological development often leads to job redundancies and that the employment problem is closely linked to industries which are not declining in the sense that they are becoming technical backwaters.

In recent years the British Steel Corporation has agreed with the trade unions and with various MPs a policy of what one may call parallel development. It has always been understood that the people who work in the steel industry are in favour of technological development. At all levels representatives of trade unions and staff have emerged hand in hand with the BSC in support of this policy, but there has always been an equal acceptance by the corporation of the proposition that such development must absorb the people who work in the industry and wish to continue to do so. There has been no acceptance, either by the trade union movement or by hon. Members on this side of the Committee, of a policy of widespread redundancies which is not followed at the same time by the creation of new jobs in the industry.

The first question I want to put to the Government is whether that is the policy they wish to adhere to, because at the present time there are many people in the steel-producing areas gravely concerned that this is not so. Some two to two and a half years ago, whenever members of the unions concerned or the Steel Committee of the Trades Union Congress, or groups of Members of Parliament met Lord Melchett and members of his board we would always receive concrete assurances that this was the policy which was going to be followed, and that the BSC board was not going to be harried by pressures from outside or from anywhere else, including the Government, into changing this policy.

Many of us are now profoundly convinced that the Government have put pressure on the British Steel Corporation, and that the scale and the tempo of the redundancies have been greatly increased against the original intention of the board of the British Steel Corporation. Certainly the policy, if it is to be pursued, will meet the firmest possible opposition from the trades unions in the industry and from Members of Parliament representing the steel-producing areas. The Government must be well aware of this. They will have seen the reaction to the announcement about redundancies in Scotland. They will have seen the expressions of concern in other parts of the country.

[MR. E. L. MALLALIEU in the Chair]

I turn now specifically to the future of the industry if we were to go into the Common Market, and how this policy of expansion and the creation of new jobs might fare in the Community. We would want the Government to reply in specific terms on what conversations they have had with the Coal and Steel Authority and other Governments. We have had no concrete information about that so far. We have had general denials from time to time when the Prime Minister answers Questions at 3.15 p.m. He cannot be questioned further then. He never turns up for any of these debates. This legislation is the Prime Minister's legislation if ever any Prime Minister was concerned with any legislation. Whenever these matters are discussed, he is never with us. This is the first opportunity we have to demand of the Government and the Ministers some concrete information. May I say at a personal level that it would not be any worse because it came from a more junior level. What we are after is the information, and we do not mind who pronounces it at the Dispatch Box.

Turning to the position of the Community between the regional policy and the actual policy concerning the future of publicly-owned industry, I would like to pray in aid one or two illustrations which prove that that link is important. I want to quote first very briefly from the General Report of the Commission for 1967. Paragraph 63(a) deals with the Dutch coal industry: Arrangements to promote economic development in the north of the Netherlands, southern Limburg and other Dutch development areas. These are designed to supplement action already taken to help development centres in the country's 'problem areas', to contribute to regional development and to reduce the employment difficulties arising from the conversion of the coalmining areas in southern Limburg. Here one sees the link between regional policy and the future of the coal and steel policy.

Although we have a technically advanced coal industry, there are areas where the problem of conversion from a coal-producing area to an area which has new and different industries is extremely relevant to the position of some areas in the United Kingdom. Therefore it is of great interest to see that over a number of years the Commission has occupied itself in considerable detail with approving or not approving some of the policies in such situations that any individual country wished to pursue.

9.0 p.m.

Moreover, a more recent case concerning the disagreement between the Commission and the Kingdom of Belgium was reported in considerable detail in the Financial Times of 27th April under the heading Commission rules against Belgian regional aids", and on the same day in The Times under the headline Belgium's regional aid programme unacceptable under the EEC rules". What is even more interesting and more strictly relevant to my purpose is the details of this adjudication by the Commission.

Here I wish to quote from Journal officiel des Communautés européenes of 4th May, 1972. What I find interesting is the great amount of detail into which the Commission goes in its adjudication. In the reports that we had in the British Press there was mention of only two cardinal decisions. The Commission told what is supposed to be the sovereign State of Belgium that it would not be allowed to give certain economic aid to as many as 41 of the districts into which Belgium is divided, excluding Brussels and Antwerp. The Belgian Government, approved by Parliament, wanted to give economic aid to 41 districts. The Commission not only told them that they could not do that and that the number would have to be reduced to 27 or 28; it went into amazing detail, mentioning all the localities to which its decision applied.

To give just a taste of the decision to the Committee so that hon. Members may be aware of how detailed the control is, I quote the decision concerning the areas in which a certaintype of aid would be permitted. Not only does the Commission talk about provinces, sub-provinces and areas; it divides them into arrondissements, which are smallish quarters of any given region. The decision reads: "…dans la province de Hainaut les arrondissements ďAth, Charleroi, Mons, Mouscon, Soignies et Thuin…". I do not blame any member of the Committee who has not heard of these places before. I have heard of only 50 per cent, of them. Hon. Members representing mining areas may have heard of more. There are another 40 different names, and, when we get on to zones where only partial economic aid will be allowed and not what the sovereign Parliament of Belgium had already decided, we find that this partial aid can be allowed only "…en prolongement de ľarrondissement de Turnhout et la province de Limburg, la zone s'étendant sur les communes de Aarschot, Averbode, Begijkendijk, Betekom, Booischot …. That is part of a sub-district.

That illustrates the fantastic detail into which the Commission went when making its hostile decision against the wishes of the Belgian Government and Parliament.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

I am wondering how the hon. Member for Penistone (Mr. John Mendelson) will use his considerable parliamentary skill to relate all this to the proposition that the Domestic Coal Consumers Council and the Industrial Coal Consumers Council should be allowed to continue. I understand that that is the purpose of his Amendment.

Mr. Mendelson

I can only say to the hon. Gentleman that he was no use as a Minister and it is quite evident that he is no use as a back bencher. I said clearly that this is the first chance that we have had to ask the Government for some definite answers before we part with the Bill. I should have thought that the hon. Member who has always professed an interest in the steel industry would have co-operated in this whatever views he may hold, instead of asking a silly, sabotaging question like that.

What I wish to establish is the amazing detail to which the Commission went in countermanding certain economic decisions that the so-called "sovereign" Parliament and Government of Belgium had taken. I take this point further by going on to the actual views of the Commission on the future of the steel industry. Here, the questions of expansion and of the future size of the industry are the crux of the matter.

I have before me another copy of the official Journal of the Community. The date is 30th January, 1970. The title is "Grand Outline of a Policy concerning Production in Steel Industry". I assume that both the Chancellor of the Duchy and the Under-Secretary know these documents backwards and forwards, that they are their daily bread, and that they have studied them many times and are familiar with the case that I am about to make.

This document, which purports to deal mainly with competition, discusses the future of the steel industry in the Community. In paragraph 15 it forecasts that in 1975 the total output of the industry of the Community will be 140 million tons per annum. It then refers back to an earlier paragraph which expressed the general view that no group, no steel company forming a group, should be responsible for the production of more than 12 or 13 per cent. of the total volume of steel produced in the Community. It says that, if 140 million tons is the expected output in 1975, any group producing between 17 million and 18 million tons of steel per annum would be reaching this upper limit.

We have been trying to elicit from the Government for many months a denial or a confirmation of the articles which appeared in British newspapers by people who have spent many years studying the Community's policy, which said that the Government have been told and the British Steel Corporation has been told that an extension towards the level of 40 million or 41 million tons output by 1980 or 35 million to 36 million tons by 1975 will not be acceptable to the Community authorities. We have never had an answer to that question.

Mr. Rippon

With respect, it has always been made clear to the hon. Gentleman that the Community has put no limit on the expansion of British steel production.

Mr. Mendelson

It has never been made clear. Nor has it been made clear in that intervention. What is involved is something which does not yet have the force of law. These are guidelines. I am asking for something different. I want to know whether the Government can tell us whether when looking at the proposals submitted by Lord Melchett and the BSC Board, which were definite and which reached the Government in March, 1971, proposing, with details, an expansion over 10 years through an output level of 35 million tons in 1975 and 41 million in 1980, they have been guided by the limits suggested here by the Commission. If there is to be any question of freedom of expansion for the British steel industry, clearly there is no possibility of achieving such an expansion if anyone is to adhere to this upper limit of between 17 million and 18 million tons per annum.

It is in that light that I turn to the redundancies. That is why it is so important to discuss these matters against the current background. What we are seeing now is a number of developments which may well fit into a pattern of policy that would be greatly disturbing to the British steel industry as a whole and, in particular, to the more northern sections of the industry and to those regions that will be in grave economic danger anyway.

On this particular concern, I want to pray in aid a short article in the American journal Fortune. We know that Fortune is a very reputable journal that has excellent contacts in the European Community and in Britain. The article appeared in May of this year at the time when the Iron and Steel Bill was in Standing Committee. The article said: The urgency of international joint ventures is perhaps most striking in the case of beleaguered British Steel Corporation, which lost an estimated 250 million dollars in 1971. In desperate need of efficient capacity, the nationalised company has approached Hoogovens Limited in Holland and Usinor of France, and a German company, with joint- venture proposals. British Steel has one or two projects in mind—an expansion of its Teesside plant on the northeast coast or a big plant on a new site on the Thames estuary (or possibly on the Continent) that could produce 15 million tons a year. The choice of project, BSC says, will depend on the amount of foreign capital it can get (the Thames plant would cost more than 3 billion dollars, about double the Teesside expansion). So far, prospective partners have shown little interest in courting the loss-ridden company. But last month the Heath Government announced a huge refinancing that will allow BSC to write off 875 million dollars in debt, which should make the old girl a little more alluring. Are there any such dangerous and dark plans to shift a part of the expansion policy of the British Steel Corporation into the Thames area or even on to the Continent in collaboration with firms there? The arguments about financing and capital can be very easily used. If the Government were to say "We do not want the responsibility of financing all the expansion of the BSC. We do not regard it as a great national asset that must be treated as a great national asset for the future. We are not concerned about where the development takes place or where the new jobs are going to", some of the major fears of the people in our development areas would be completely fulfilled.

Mr. J. T. Price (Westhoughton)

I am obliged to my hon. Friend for bringing those facts to the notice of the Committee. I happen to represent a northern area of Britain which is under threat. The Irlam district, for example, is the only remaining steel plant in Lancashire and services the biggest heavy engineering complex in England. That has been sentenced to death in the next two years. The Stanton iron works in Nottingham has received a similar sentence, and the great complex at Mother well in Scotland is under a similar threat of very heavy redundancies.

My hon. Friend has referred to the American commentary. I do not have at my disposal any means of checking the veracity of those comments but no doubt they are from a very reliable source. But this would explain the contraction of the British steel industry, which in its present manifestations is looking forward to not a ceiling of 40 million tons a year but one of 24 million tons, as I know from another activity in which I am involved in the House of Commons. Will the Minister say whether or not the figure of 24 million tons has been accepted by the Government as a limit to British steel production over the next few years?

9.15 p.m.

Mr. Mendelson

I move to my last two points. One concerns a recent report published by the Yorkshire and Humberside Economic Planning Council. Certain Yorkshire MPs including myself, had a meeting with the council and with its chairman recently. I took strong exception to one paragraph in its report. The council says the report was compiled by a body which did the research, and, although the report involved the backing of the council, it was suggested that it did not have the same authority as a report published exclusively by the council. I do not know whether I accept that explanation, but I wish to put it on record in order to be fair to the man who made the statement to us.

The paragraph which disturbs me, and which should disturb all Sheffield MPs and hon. Members representing South Yorkshire constituencies, said that there would be some development on the Continent of collaboration between British and Continental steel firms and that this would first lead to large-scale storage of steel and subsequently to further developments of joint production on the Continent. It is backed by the chairman of the Yorkshire and Humberside Economic Planning Council, a man who is involved in steel production in no small way, and someone who is supposed to be devoting most of his time to attracting jobs into Yorkshire and Humberside. I would not think he should support a report of that nature. This is not quite such an innocent paragraph, because these people probably know what is intended by some Ministers should Britain join the Common Market.

My last point concerns the conclusions of the Commission about the guidelines on the future of competition in the steel industry in the Community. In one paragraph the document says that the Commission would regard it as very serious if very large groups were to develop in the Community among steel producers, very large firms or groups of firms which produced more than 12 or 13 per cent. of total output.

We do not want a formal answer from the Government whether there have been any such official discussions or not. We want a full account of all the talks that have taken place and all the official contacts that have occurred, because this is linked to a very important point on which, once again, we have not had an explanation from the Government in recent months. When the Minister for Industry announced the Government's decision that the British steel industry should develop output only to 28 million tons in the next 10 years, he was forced to admit under questioning that the corporation wanted a higher figure. The Minister was questioned time and again on what level steel imports should reach in the middle and later 1970s. Figures as large as 8 million tons were floated but we have had no word from the Government on that question. It would have to be a figure which would fit in with the limited growth figures put forward by the Government. If the capacity of the British steel industry is limited to 28 million tons and if there is an upturn in the economy, we shall need to import at least 8 million tons of foreign steel.

Our colleagues from the coalmining constituencies have reminded us that there is far too much imported coal at present. It is running at a level which cannot be economically justified. The Government are avoiding taking the measures they should take at home to encourage output and instead are importing coal. Are they now preparing an even more dangerous policy? Are they planning to import 7 million to 8 million tons of foreign steel, at the same time severely limiting development in the British industry, endangering jobs and failing to provide for the development of new jobs as promised by the BSC when it submitted its original plan and secured the agreement of the trade union movement to that plan?

Those are serious questions asked in the steel and coal areas up and down the country. The Government are duty bound to give serious answers tonight.

Mr. Ridley

Listening to the diatribe of the hon. Member for Penistone (Mr. John Mendelson) I was tempted to ask myself why Lord Melchett is so strongly in favour of joining the Community and why what he sees as the best interests of the steel industry are so different from those which the hon. Gentleman sees.

I had come tonight hoping to talk about the future of the coal and steel consumer councils, and I shall say something about that later. I cannot resist straying into the territory so trampled upon by the hon. Gentleman and saying a few words about the size, shape and future of the British Steel Corporation.

First, the hon. Gentleman said that the steel industry was a highly technological industry and that its future was assured provided only that we allow endless expansion to take place and endless investment.

Mr. John Mendelson

I did not say "endless".

Mr. Ridley

I withdraw that and substitute "investment on a large scale".

I must tell the hon. Gentleman, who spoke genuinely in the interests of his constituents who are steel workers, as will other hon. Members, that if we made massive investments in steel and had a technologically superb steel industry there would be not more employment but considerably less. Our competitors in America are already producing steel with perhaps one-third to one-quarter of the amount of labour we use and there is now, I think, a steelworks in Japan producing high-quality steel with one-seventh the number of workers that we employ. Therefore we realise that there are no enjoyable and easy alternatives.

Either we go on with old plant and over manned equipment in which case we have crippling losses, uncompetitive ness, and a dwindling market, or we pump money into the steel industry to make it modern and highly efficient in which case we have dwindling employment. The hon. Gentleman is living in a pink cloud, thinking that somehow by investing we can produce not only more steel but more jobs. I advise him to talk to someone who has studied the steel industries of the world, to acquaint himself with the facts of steel economics in the coming decade, and he will find that he is living in a fool's paradise.

I hope the corporation will be able to expand, but I am sure the whole Committee will agree that its expansion will entirely depend upon its ability to sell its products, whether in the home market or by exporting them. No one would wish to have ingots of steel piling up unsold in the stockyards of our mills. We all know that that is what leads to closures, redudancies and unhappiness in the steel-working areas. Therefore, it is clear that the estimates of capacity in the future must be based upon the estimates of what can be sold at the cost of production.

I believe the Government would be right not to encourage the corporation to build plants and capacity which would produce more steel than could be sold. Neither I nor the hon. Gentleman has done the sums. We have not done the market research. We do not know what that figure is. I respectfully submit to the hon. Gentleman that it would be wise to make sure that the steel industry which exists in 20 years' time is of a size which will enable it to sell its products competitively and profitably in the markets of the world. This is why Lord Melchett is in favour of joining the Common Market, because he sees a market where he can sell more steel. I do not think that the fears of the hon. Gentleman about competition in Europe were justified, because if the professional people believe that it is the best thing for their marketing I would have thought it was wise to allow the leaders of the steel industry to be accepted as being right.

I have one other point before coming to the Consumer Council. The hon. Gentleman said he had never been told by the Government whether it was possible for the British Steel Corporation to expand and he implied that the reason why the Government were perhaps holding back a little on the grandest plans for the corporation was that they had been told to do so by Brussels because Brussels did not want any very large steel companies dominating the Market. From my experience I would like to rebut that absolutely. I would also like to rebut what the hon. Member said, that no member of the Government has ever given him a straight answer on this point. I would draw his attention to the OFFICIAL REPORT of 16th December last year when I said: My hon. Friend the Member for Bedford asked a similar question: whether the European Commission would control the expansion of the corporation so that it did not reach a size to threaten true competition within the Common Market. I do not think my hon. Friend need worry about this. The power that the Commission has taken is to prevent mergers which would lead to units so big as to dominate the steel market. But normal expansion through investment and growth is not a matter which it would consider checking and I do not believe that there would be any question of the BSC not being able to expand as it was required or wished to do."—[OFFICIAL REPORT, 16th December, 1971; Vol. 828, c. 966–7.] That is as clear a statement of Government policy as the hon. Gentleman could ask for. Even though it may not be I who now speak from that Box, when I made that statement I spoke from that Box.

Mr. Michael Foot (Ebbw Vale)

Could the hon. Gentleman also tell us from his experience what he believes to be the results of the latest investigation of the British steel industry by the High Authority, embarked on a month or two ago? Can he tell us what stage that has reached and when it will be presented to the House?

Mr. Ridley

As the hon. Gentleman knows I embarked upon the back benches a month or two ago, so that I cannot answer that question. He must ask my right hon. Friend. I merely wished to correct the statement that authoritative noises had not been made on this most important point, and I think that I have done so. The hon. Member for Penistone suggested that the temptation would be for the steel plant to be concentrated in the South and he spoke of a plant on the Thames.

I ask the hon. Member to think about this. The geographical advantages of the British Steel Corporation in an enlarged Community where competition is free will be greatest where it is furthest from its competitors. The markets of the North of England, Scotland, Wales and Northern Ireland will be far more easily held by the BSC than will be the markets of the South of England where it is cheap to bring in steel from the Continent. I would have expected that the BSC would be planning to hold the northern part of the market with minimum inroads from competition. Competition will develop closer to the Channel coast from Belgium, France and Holland. Competition there will be and I for one welcome that.

That brings me to the Amendment, if I may make so bold as to talk about it. One of the Amendments suggests that the power of the Iron and Steel Consumers' Council to suggest that prices be held down should be abolished—indeed, that the Iron and Steel Consumers' Council should be abolished and that the Secretary of State should be unable to make directives.

I am surprised to find the hon. Member for Ebbw Vale (Mr. Michael Foot) putting his name to the Amendment. I remember the hon. Gentleman time and time again getting up in the House and condemning the Government for holding down steel prices. On Monday we debated rising food prices and were censured; on Tuesday we debated some other rise in prices and we were censured; and on Wednesday of every week the hon. Gentleman gets up and censures the Government for not allowing steel prices to rise. That is his logical approach to these matters. But here his wishes have been put into effect. The Iron and Steel Consumers' Council is being abolished and no more Government interference will be possible in steel prices after 1st January. I look forward to the hon. Gentleman joining us in the Lobby.

9.30 p.m.

Mr. Michael Foot

I do not know whether the hon. Gentleman is deliberately misrepresenting me or doing so by accident. The fact of the matter is, as the hon. Gentleman will well recall from the many debates in which we have participated, that I have always explained I was not claiming that no Government should have any right to interfere with the prices of the steel industry and other industries. I always protected our view on that matter. I was complaining about the Government's discriminatory intervention in interfering with steel prices, thus preventing the steel industry from having the same kind of latitude which is allowed to many private industries.

Mr. Ridley

With the liberty of the back benches, I agree with the hon. Gentleman. That is why I am delighted that the Amendment will not be carried tonight.

That brings me to the last point I want to make. In the Bill the central functions of consumer councils as we know them for coal and steel are being abolished. By "central functions" I mean their power to comment on the general level of prices and to make representations.

I support entirely the ombudsman or consumer protection of consumer councils. Particularly I commend the area regional councils of the gas and electricity industries, which take up the complaints of consumers and protect the individual against a monolithic supply organisation. However, the only reason why we have to have central consumer councils to comment on prices is that all these nationalised industries are domestic monopolies: gas, electricity, coal and, to all intents and purposes, steel.

Having created these monopolies, against which I fought when I was sitting on the other side of the House and would continue to fight if they were to be extended, it was necessary to set up consumer councils. The idea was that this would lull the individual into thinking that his interests were being protected. But let every right hon. and hon. Member be honest with himself. Do we believe that the central consumer councils of nationalised industries have had any impact upon prices, efficiency, productivity or any of the factors which make for things being cheaper as opposed to move expensive? Of course not. They have not made one jot or tittle of difference. What makes a difference to prices is competition, and at last we will have our great British Steel Corporation exposed to full and fair competition with the Continent.

Mr. J. T. Price

How does the hon. Member know?

Mr. Ridley

I know because I have read the European Steel and Coal Treaty. I have seen the scrupulous fairness with which it is administered from Luxembourg. Instead of having Mr. Jack Frye, to whom I pay great tribute, and his council commenting in vain against the mammoth of the Government and the Steel Corporation joining together to rig prices, we will have German, French and Dutch steel edging across the Channel at competitive prices. This will be of far more benefit to the consumer of steel than any consumer council.

If hon. Gentlemen opposite claim to represent the interests of either steel workers—

Mr. J. T. Price

What about the thousands out of work?

Mr. Ridley

—or coal miners, they would be well advised not only to withdraw the Amendment but to support Lord Melchett, Mr. Derek Ezra and Lord Robens, the leaders of these great industries, who are foremost in their advocacy of joining the Common Market.

Mr. Alex Eadie (Midlothian)

I do not wish to be unkind to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), because I know that when people suffer disappointments it is easy to rub their noses on the ground, so to speak. If, however, the hon. Member was trying to persuade anybody to support the Government on the proposition which they have had before the House and the Committee for many weeks, I should think he was a great embarrassment. It may be that he is not a great embarrassment in the sense that the Government are grateful to get allies from their own back benches; I am talking about getting support from hon. Members on this side of the Committee. I address myself to the Chancellor of the Duchy of Lancaster who has been giggling throughout the debate. There is nothing funny about it.

The hon. Member for Cirencester and Tewkesbury, who dealt with the consumer council for coal, paid scant regard to the fact that we should have some democratic content within the structure of nationalised industries or even in private industries where people, however successful or varyingly successful, have tried to influence the progress of an industry or the price structure within it.

The Committee should realise that we shall not have either coal consumer councils or steel consumer councils within the Common Market. This is no doubt why the hon. Gentleman is probably so happy. If we go into the Common Market we shall have merchants' associations. There will not be any consumer councils of the kind we have known or been associated with in this country.

The Under-Secretary must tell us, when he replies, whether he is happy that the democratic content should be taken out of what was traditionally associated with the main industries in this country by the mere fact of deciding to enter the Common Market. Is the philosophy now that the consumers can go to hell and in substitution for consumer councils we shall have merchants' associations dictating prices and policies? The hon. Gentleman should be honest and tell the House whether he is happy about that situation. If so, the people of this country are entitled to know. The hon. Gentleman has said that he likes the icy blast of competition. Are the Government more concerned about the philosophy of competition than about people or consumers?

I congratulate my hon. Friend the Member for Penistone (Mr. John Mendelson) on the way he moved the Amendment. I was very much impressed by what he said about the coal industries of Belgium and Holland. I think I have recited this argument before. With what kind of organisation are we to be associated under the Treaty of Paris? A couple of years ago there was a European conference, at which there was British representation, to discuss the coal industry. I wonder whether Mr. Ezra was very enthusiastic about it. For example, it was spelt out at that conference that there had been a serious miscalculation about the part that coal should play in the energy requirements of certain countries. Belgium and Holland admitted that they had run down their coal industries substantially and that it was now too late to do anything about it. They had planned to contract their coal industries to such an extent that there was nothing they could do about it. The coal industry was already in contraction, yet the bureaucratic content of this body with which we are associating could not take a decision to halt the procedure of contraction in that industry.

It is no secret—we read it in the papers every day—that great errors and miscalculations were made in the Treaty of Paris. We discover, for example, that in relation to natural gas France is in a serious dilemma, having made a 20 per cent. over calculation. Even in this country we have discovered—and we are grateful to the hon. Member for Cirencester and Tewkesbury because it was he who told the House this—that there is only about a 20 years' supply of natural gas. I know that he incurred the wrath of many of his hon. Friends when on 11th March this year the hon. Gentleman said from the Dispatch Box that the estimate he had for natural gas was about 20 years. I have given the date and the quotation, and the hon. Gentleman cannot deny that.

Mr. Ridley

I got the rap; I did not deny the figure.

Mr. Eadie

I will pronounce it the English way if it pleases the hon. Gentleman any better. I happen to be a Scotsman and I get the lingo a bit wrong occasionally. The hon. Gentleman was in the unfortunate position of looking towards us and we were in the unfortunate position of looking at the faces of his hon. Friends behind him while he was making that pronouncement.

I was trying to explain the Treaty of Paris with which we are associated, the gross miscalculations in relation to energy by Holland and Belgium and the dilemma that France is in at the present time. I think I was entitled to bring that to the attention of the Committee because in the course of the hon. Gentleman's speech he tried to infer that, if we became a member of that body, we would become much more efficient and there would be the draught of competition, yet all the evidence indicates that we are joining what is in many respects a very bureaucratic and inefficient body.

I asked a question about the coal consumers' council and the Under-Secretary on the Front Bench nodded his head to indicate that he would like to reply. I should like to pose a specific question in relation to the restructuring of the mining industry. The hon. Gentleman is pretty well apprised of the arguments in relation to this: that our coal industry is burdened with debts and financial burdens that are lying, as I have often said, on the backs of the miners, yet neither the industry nor the miners have any responsibility for the financial burdens placed on them. I have explained before in the House that if we consider some new pits that were sunk on the first day of nationalisation, they were the result of plans not of the National Coal Board but of the private coal owners, who were paid compensation; they got what was termed "unforeseen profits". Many of those pits are now closed after millions of pounds were spent on them. They were handed over by private enterprise to the National Coal Board and compensation was paid on the basis of unforeseen profits, but not a penny of profit has been made since the day they commenced. That is the kind of debt that is on the backs of the miners and the kind of burden that is placed on the finances of the National Coal Board.

I see the hon. Gentleman tut-tutting but I would remind him of Rothes Colliery and how he talked about it once in Committee as being the handmaiden of the National Coal Board. He was unfortunate when he said that because I happened to live in the area and I know that it was part of the old Fife Coal Company, a private enterprise. It is fortunate that I lived near enough to correct him at that stage.

A Question was asked yesterday—No. 70, which can be found in column 230 of HANSARD—by my hon. Friend the Member for Wigan (Mr. Fitch). It concerned the capital reconstruction of the National Coal Board's finances. My hon. Friend was told by the Minister for Industry that he is considering the proposals in relation to capital reconstruction.

[Sir MYER GALPERN in the Chair]

9.45 p.m.

I have a direct question to put to the Minister. Since the Department is considering the question of capital reconstruction, how will this be affected by our entry in accordance with the Treaty of Paris? Will entry make any difference? Will the Government be able to carry out a capital reconstruction of the coal industry? Or does it mean that when we enter the Coal and Steel Community restrictions and reservations will be placed upon capital reconstruction? This is a very important point. The miners want to know the answer, and they want a direct and specific answer.

Again, what about coal imports? We are in a ridiculous situation. Last Friday I put a question about imports to the Chancellor of the Exchequer when he made his terrible announcement, which I described as a defeat for the Government and the British people. Next month in Scotland hundreds more men will be out of a job in the coal industry. Yet the Government are part and parcel of a policy of importing 3 million tons of coal. The ridiculous thing about it is that the imported coal is dearer than the coal which our own miners are producing. What kind of a Government pursue a policy of importing 3 million tons of coal which must be a further burden on our balance of payments?

We want to know whether, after entering the EEC, we in this Parliament will be able to influence the Government to understand that their policy of importing coal is a nonsense, particularly for a country facing a financial crisis. We know that when we enter the EEC coal will be able to come into this country from France, Belgium and Germany. Yet it is not even as simple as that because foreign coal comes in through Rotterdam. This was one of the problems we faced during the miners' strike. We did not know whether the coal coming in from Rotterdam was Australian, Polish or American. We are entitled to ask what sort of agreement the Government are entering into in relation to foreign coal.

The hon. Member for Cirencester and Tewkesbury talked about assurances given by Mr. Ezra. Mr. Ezra is a rather lonely man these days. Few people on the trade union side of the coal industry have much confidence in the predictions and optimisms of Mr. Ezra. If I were trying to quote authorities on the position of our coal industry after we enter the EEC, I would find it difficult to include his name among them.

The contraction of the steel industry has a direct bearing on the livelihood of our miners. Contraction of the steel industry means the need for less coking coal. There is no viable economic alternative for coking coal, and if the steel industry needs less of it that must place more jobs in the coal industry in jeopardy.

Mr hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) unsuccessfully applied under the Standing Order No. 9 procedure for a debate on the tragic blow that has struck Scotland with the loss of 7,500 jobs—it may be a thousand or two more—in the steel industry. A contraction of such magnitude in the steel industry is important to the Scottish people. It may result in the multiplication by three of the number of jobs lost. The 21,000 people whose employment prospects have disappeared practically overnight will not be impressed by being told that this is the result of competition and that the steel industry is being modernised and streamlined.

My hon. Friends who are associated with the mining industry could hardly be described as Luddites. Throughout our lives we have been associated with modernisation in the mining industry and we have wished it to come. We do not argue against technological improvement in the steel industry. When plant becomes obsolete we do not argue that it should be kept in being to provide jobs.

The people of Scotland are entitled to know what will happen to the Hunterston plant. We argue that the only solution is for the Government to believe in the fight for economic growth and to forget about the 28–36 million ton target. The Government must go for growth and greater production. There could be a green field complex in Hunterston and the area could be developed, thus helping to save many jobs which will be lost as a result of technological obsolescence. That is the answer that we see.

I hope that the Minister will try to answer the questions which I have raised. They are of great moment not only to the the people of Scotland but to the people of England and Wales who are associated with the coal and steel industries.

Mr. David Crouch (Canterbury)

I do not think anyone would accuse the hon. Member for Midlothian (Mr. Eadie) of being a Luddite in relation to the coal industry or in relation to the steel industry if he meant what he said in his closing remarks. I do not think there are many, if any, Members of the Committee who are Luddites at heart. We sometimes have to listen to rather woolly arguments on industrial development and modernisation when hon. Gentlemen opposite—I am not referring to the hon. Member for Midlothian—try to envisage the changes that have taken place and are taking place in the coal industry.

We owe a great debt of gratitude to the mining industry, the National Union of Mineworkers, the National Coal Board, the House of Commons and all those who in the last 20 years have taken part in the modernisation of, and the massive investment in, the mining industry, and in the reduction of the work force in an industry that used to employ nearly a million men. We have seen the changes occur, industrial and social, resulting in a revolution in industrial patterns. It has been done in this country brilliantly, with co-operation. It has also been done in Europe. It has been done under the management of the European Coal and Steel Community. I would not argue that Europe has done it better than we have. This change in industrial shape, from the 19th century to the latter end of the 20th century, has taken place.

When we look at the steel industry we see a change taking place subsequent to the changes which have taken place, and which are still occurring, in the coal industry. The challenge which has faced Parliament over the last two or three years, as we have looked at the steel industry seriously, is the magnitude of change that we must face with the steel industry in the next 30 years.

I do not have to refer to the US magazine Fortune to learn that there was once put forward by some industrial thinkers and engineering developers an idea of a great steel complex in the Thames Estuary. Such ideas have been put forward in this country for the past two or three years and seriously floated by engineers, economic planners, thinkers and developers. That is much closer to my heart: it is with insight of my constituency. I could see it 10 miles away as it developed. I would be concerned and horrified if that were to happen. I am not sure, if I were to look ahead 30 years, that I would be right to be horrified if that was the right place for such an industrial development to take place for the benefit of the country.

Sometimes in Parliament we hear not a philosophy of Luddite thinking so much as—when we try to consider the problem of change—the impossibility of accepting all that flows from change. We hear other things in debates such as this which do not encourage me. We get a feeling of absolute gloom that this country and our great coal and steel industries are not going to be in a position to take up the opportunity which we shall find when we enter into the larger Community and a larger market. Hon. Members opposite feel we are not going to be able to compete. Yet they come to this Committee and tell us that we shall suffer imports from the coal producers in France and Germany. Why did they say this?

The hon. Member for Midlothian tells us how he has co-operated in the modernisation of our pits. Why should he ask the Committee to assume that we must suffer under the competition? I cannot accept that. I have seen the modernisation of our pits. I have seen the hard work which miners put into their jobs. I respect that. They have been examples, in hard work and productivity, to the whole of industry. I accept that. I do not think there is one mining Member in Parliament who would accept that we have had an element of absenteeism that has been too high in some areas. Perhaps there are reasons for this. Nevertheless the facts are there.

Mr. Denis Skinner (Bolsover)

This is where the absenteeism is!

Mr. Crouch

I give the hon. Member a chance to interrupt me because he likes to do so. I do not think he disagrees with much of what I am saying—because I have praised his industry during the last five minutes—becauseof what he has contributed to his industry outside Parliament.

I now return to the three Amendments—

Mr. Arthur Lewis

The hon. Member showed his appreciation of the miners when they had their wage increase.

Mr. Crouch

The hon. Gentleman may have forgotten that I made three speeches in this House and took the view—

It being Ten o'clock, The CHAIRMANleft the Chair to report Progress and ask leave to sit again.

Committee report Progress.