Steel Industry (Hansard, 31 January 1973)

§ 7. Mr. Strang
asked the Secretary of State for Scotland if he will make a statement on the implications for long-term industrial development in Scotland of the Government's decisions on the future of the steel industry.

§ 17. Mr. Dempsey
asked the Secretary of State for Scotland if he will make a statement on the consequences for long-term industrial development in Scotland of the Government's decision concerning the steel industry.

§ Mr. Gordon Campbell
The plans for the steel industry in Scotland represent an expansion of 25 per cent. in 10 years of steel-making capacity. This expansion will provide a range of finished steel products for steel-using industries and thus assist industrial development in Scotland.

§ Mr. Strang
Is the Secretary of State aware that the current steel plan could sabotage prospects for industrial expansion in Scotland? Does he recognise that an expanding and diversified steel industry is fundamental to the development of the engineering industry in general and the offshore industry of Scotland in particular, especially in view of the basing point pricing system of the Common Market? What will the right hon. Gentleman do in face of the fact that the current steel plans are unacceptable to the Scottish TUC, the Scottish Council 1342 (Development and Industry) and the people of Scotland as a whole?

§ Mr. Campbell
I do not agree with what the hon. Gentleman says. By advancing the steel-making capacity by 1 million tons—that is, 25 per cent.—the programme for the next 10 years meets the requirements of the steel-using industries as well as of the Scottish steel industry itself. Some of us hoped that there might be the possibility of something quite new and different in Scotland, but I must point out that this expansion compares extremely favourably with the increase of only 200,000 tons in steel-making capacity during the nearly six years of the Labour Government.

Mr. Edward Taylor
Have the new investment plans been approved by the ECSC? Second, when may we have an indication of the effect of the new Common Market pricing system on steel prices throughout Scotland? For example, shall we find that steel in Dundee and Aberdeen and places far away from steel-producing areas will cost considerably more than it does at present?

§ Mr. Campbell
On the first point, I do not think that approval was required for this programme. Second, the basing point system, which has been arranged so that there are a number of basing points in Scotland, should cover the matters about which my hon. Friend is worried.

§ Mr. James Hamilton
Can the right hon. Gentleman tell us where the money will be spent in Scotland out of the £400 million programme which the British Steel Corporation has submitted to the Government? Second, recalling that the Government have told us that they will bring other jobs to replace those which are being lost in the steel industry, will the right hon. Gentleman say where those jobs are to come from, since we have redundancies now which the Minister does not yet know about and, what is more, the jobs we are getting are not even offsetting the redundancies?

§ Mr. Campbell
The way in which the investment of £400 million will go over Scotland in the next 10 years would call for a catalogue which I could not produce now, but I shall ask the British 1343 Steel Corporation to provide the hon. Gentleman with the details as it has worked them out. We have been concerned with the main projects, the expansion of Ravenscraig, the iron ore terminal and other major investments, and the details of all the investments in little bits of the plan would require a catalogue. I have no doubt that the hon. Gentleman can have those details, and I shall pass his request on.
The redundancies have been stated by the corporation as being about 7,000 over the next five or six years, which is about the same as the number which have taken place over the past five or six years in Scotland. They are job losses rather than redundancies. [HON. MEMBERS: "Oh."] Some of them will be dealt with by retirement and so on. The main point here is that in an industry in which there is to be a 25 per cent. expansion and which is being modernised—I am sure that all hon. Members agree that the open hearth furnaces are obsolescent—modernisation means a reduction in jobs.

§ Mr. Lawson
The right hon. Gentleman will be aware that the plan of which he speaks is at present in large measure a statement of intention. Will he ensure that the intention is realised in fact, and will he bear in mind that we require a substantial steel foundry to remain in Scotland, at the very least, and a substantial section of the special steels industry? Will he see to it that Scotland is not deprived of those sections of this important industry?

§ Mr. Campbell
This is a statement of an investment programme agreed with the British Steel Corporation by the Government, and there was considerable pressure from all sides, I think, for such a statement to be made as soon as possible. I take note of the other points which the hon. Gentleman makes. I have made clear that my concern is to have a steel industry in Scotland which can provide the wide range of products which the steel-using industries need. Apart from the problem of redundancies and loss of jobs in the steel industry itself, there is the effect on many other industries in which jobs can positively be created or lost, and I am very much aware of the matters which the hon. Gentleman has raised.

§ Mr. Dempsey
Is the Minister aware that the allocation to Scotland in the BSC investment programme is totally insufficient to guarantee an expanding economy for Scotland, and is he further aware that the basing point policy for rod steel will mean throwing hundreds of jobs to the wolves in Scotland? Have we not now arrived at the point where we should be thinking in terms of a Scottish steel corporation of our own in orler to protect the industry in Scotland?

§ Mr. Campbell
If an expansion of 25 per cent. over 10 years is to have such dire effects, I can only conclude that the expansion under the Labour Government of 200,000 tons must have been disastrous. During that time the Labour Government nationalised the steel industry and they had every opportunity then to produce a Scottish steel corporation had they wanted to do so.