HC Deb 03 December 1973 vol 865 cc903-4
19. Mr. Leadbitter

asked the Secretary of State for Trade and Industry if he will make a statement on steel price increases, and their effect on the economy.

Mr. Tom Boardman

The increases made by the British Steel Corporation from 16th November still leave its prices substantially below those of its principal competitors abroad. In announcing them the corporation said that it had very much in mind the need to contribute to the fight against inflation. The independent United Kingdom steel producers have also exercised restraint. As my hon. Friend told the hon. Member on 12th November, an average increase of 1 per cent. in the price of steel might raise the retail price index by about one fiftieth of 1 per cent. It would probably add about 0.06 per cent. to industrial costs.

Mr. Leadbitter

The Minister is not telling the House the full story. Will he be honest and tell the House who is deciding the price increases? Is this the first of a number of price increases in order eventually to raise the price to that in the Common Market? Are we, in the United Kingdom, making our own decisions? Has the Minister any executive power or authority in a British steel industry? Finally, will the Minister inform the House how he expects the British steel industry to be competitive if, outside of market forces, for political reasons I suspect, or, for Common Market purposes, there is a unified, common price system?

Mr. Boardman

The decision on prices was one for the corporation which, as I told the hon. Gentleman, took full account of the importance of the Government's counter-inflation policy. There is no obligation on the British Steel Corporation to align its prices with those of the European producers, which themselves vary. The British Steel Corporation, subject to the restraint about non-subsidisation and so on, has a freedom which I believe will enable it to operate efficiently for the purposes of the Community and to build up the industry that we want.

Mr. Burden

Has not the situation arisen in which, because of the competitive price of British steel, we are exporting it and having to buy back in certain areas from abroad, which is certainly to the detriment of our economy and is causing difficulties in certain areas in this country, certainly in ship plate?

Mr. Boardman

The corporation has considerably cut back its exports below the level which it had anticipated in order that it can give further production to the home market. I have had discussions with the industry, the CBI and a number of other people to see whether the system of allocation can be improved upon and to overcome some of the problems, which are world wide, with regard to the shortage of steel which is affecting parts of our own industry.