HC Deb 04 November 1974 vol 880 cc663-5
3. Mr. William Hamilton

asked the Secretary of State for Industry if he will make a statement on the future of the steel industry in Scotland.

The Under-Secretary of State for Industry (Mr. Michael Meacher)

The British Steel Corporation's development strategy provides for the investment of some £400 million in Scotland in the period to 1980. By the early 1980s the corporation expects public sector steelmaking capacity in Scotland to have risen by almost 30 per cent. from current levels.

In Scotland as elsewhere the corporation's plans envisage the closure of its older and less economic plant. This aspect of its development strategy is being reviewed by my right hon. and noble Friend the Minister of State. Lord Beswick, who will be visiting Scotland next week to see the workers and consult those who would be affected. He will subsequently hold a tripartie discussion in London on the proposed Scottish closures with the corporation and the TUC Steel Committee, including representatives of the works affected.

Mr. Hamilton

Is my hon. Friend aware that that will be received with some confidence in Scotland, but can he assure the House that, if there is a diminution in employment in the steel industry, compensating employment will be provided in other fields? Will he scotch, once and for all, the nonsense that was produced at the last election by certain opponents of the Government that after the election the Scottish steel industry would be finished?

Mr. Meacher

On the second point, it is certainly untrue that the steel industry will be finished in Scotland as the result of this review, but rather the reverse. A very large amount of expenditure is being put into Scotland. I have already indi- cated that it will be £400 million. A significant proportion of this, under the BSC's development strategy, has already been approved by the board and these investments are now under way, including a modern steel plant at Ravenscraig which, together with other plants that are planned, will push up steel capacity in Scotland from 3½ millions tons to 4½ million tons.

With regard to employment, of course the point about the kind of review that we are undertaking is precisely to ensure that employment is safeguarded. This was not the case under the joint steering group conclusion. The whole point of this review is to ensure that employment is fully safeguarded in an improved and stronger steel industry or in viable alternatives.

Mr. Teddy Taylor

Does the Minister agree that it would greatly assist the future of Scottish steel if the Government would adopt a system of uniform prices for coking coal throughout the United Kingdom? Does he further agree that it would be accepted as proof of the corporation's interest in regional development if it would consider following the practice of Government Departments and transferring its grotesque, large and growing headquarters from the centre of London?

Mr. Meacher

I will certainly convey the hon. Gentleman's views on the second point to the British Steel Corporation, with which such a decision would lie, but the question of the price of coke and coal is a matter for my right hon. Friend the Secretary of State for Energy, and I will see that the hon. Gentleman's remarks are conveyed to him.

Dr. Bray

Is my hon. Friend aware that the present market position is very buoyant as the result of North Sea developments and also as the result of the favourable prices in the British steel export market? Therefore, there is no need in the short term to talk of closures or redundancies in the Scottish steel industry. Will he ensure that there is no such talk next week?

Mr. Meacher

The point of the steel review is to ensure that the steel industry in the long term is on a viable basis, and this requires some transmission from the open-hearth process to the basic oxygen process. I agree that this should not, and will not, mean significant and substantial redundancies—far from it. This is a matter which is now being reviewed, not only because of the advantages to which my hon. Friend refers but because of a significant developments that are being brought into operation at Hunterston—for example, the direct reduction plant, the first in Great Britain—which should make a very considerable difference.

Mr. Gordon Wilson

Will the hon. Gentleman give an undertaking that there will be no closure of the open-hearth furnaces at the Lanarkshire steelworks and, therefore, no redundancies until such time as the future investment takes place, so as to avoid loss of employment in the Scottish steel industry?

Mr. Meacher

The whole point of the steel review is precisely to examine in the case of each site the way in which it is possible to provide for continued employment, whether in the steel industry or as the result of alternative investment. This is precisely the reason why my right hon. and noble Friend the Minister of State is visiting Scotland next week and will be holding tripartite discussions, not only with the TUC Steel Committee and the corporation but also with Members of Parliament. and he will be able to make representations himself, if he so wishes, or meet local representative groups.