HC Deb 06 May 1975 vol 891 cc1215-22
Mr. Heseltine

(by Private Notice) asked the Secretary of State whether he will make a statement on the latest forecast by the Chairman of the British Steel Corporation of the consequences of the corporation's current trading position.

The Secretary of State for Industry (Mr. Anthony Wedgwood Benn)

At a meeting yesterday between the British Steel Corporation and the TUC's Steel Committee, the corporation put forward proposals which were then published and which, I understand, would involve a loss of between 16,500 and 20,000 jobs this year. Following a meeting between the TUC's Steel Committee and myself, which also took place yesterday, I have today written to the chairman asking him to explore the corporation's proposals fully with the unions, taking full account of their views and any alternatives which they propose and making it clear that the Government must know the outcome of these discussions in good time before any final decisions are reached.

To meet the effect of the present recession on the corporation's cash flow and to enable it to maintain the momentum of its capital investment programme, the Government are seeking by legislation now before the House, published on 1st May, to increase the corporation's borrowing limit by £750 million.

Mr. Heseltine

Will the Secretary of State say whether we can look forward to an early debate on this subject in view of the wide public concern—concern which his reply this afternoon will have done nothing to allay—about the whole relationship of the Government to the British Steel Corporation? Secondly, will he explain why he has not chosen to amend the financial duties of the corporation and come to Parliament for a change in the present situation whereby the corporation has to earn an 8 per cent. return on net assets employed? Thirdly, how can he reconcile his claim in the House a few weeks ago that he had saved 13,500 jobs with today's announcement relating to the loss of between 16,500 and 20,000 jobs over the next few months?

Mr. Benn

I made no such announcement. I replied to the hon. Gentleman's Question by giving the figure which the corporation put to the unions. I am surprised—or perhaps not so surprised—that he should mock our attempts to safeguard jobs.

The hon. Gentleman's other questions are matters for my right hon. Friend the Leader of the House. I should greatly welcome a debate on the steel industry, because I believe that, in the public interest, matters which previously have been handled by private negotiation between Ministers and chairmen of corporations should be brought more fully into the open so that everybody can understand what goes on.

Sir G. de Freitas

Is my right hon. Friend aware that all hon. Members with steel constituencies have for several weeks been pressing the Government for a debate? Will he bring his influence to bear on the Government and the Leader of the House so that we may have an early debate on this important matter?

Mr. Benn

The Leader of the House knows full well that I should be very happy for a debate to take place. I understand the concern of hon. Members with steel constituencies and other Members who are more broadly concerned with matters of public policy in relation to the nationalised industries and their sponsoring Ministers.

Mr. Pardoe

Is the Secretary of State aware that the British steel industry was nationalised by British Governments in 1949, denationalised in 1959 and renationalised in 1967—and that the end result of all that, in the chairman's words yesterday in his letter to the right hon. Gentleman the Secretary of State for Industry, is that we have a steel industry which is out of date and whose equipment is obsolescent and obsolete? Would he care to say whether this is the result of the two-party game played over the last 25 years? Does he not realise that what is wrong with British steel, as with British industry generally, is the British system of government?

Mr. Benn

No, Sir. But I should draw the hon. Gentleman's attention to the fact that the investment programme in the steel industry is now going forward at a rate of £8 million a week of new investment and that the present Government in their examination of the 10-year strategy are not holding back on that new investment. We have been trying to review the impact of the situation on communities which have no other opportunities for employment. I believe that to be the duty of any Minister, and of any Government.

Mr. John Mendelson

Is my right hon. Friend aware that the announcement by the Chairman of BSC that he is in favour of up to 20,000 redundancies has caused dismay among people at all levels throughout steel-making areas who earn their living in the steel industry? Will he convey to the chairman, in the strongest possible terms, the fact that it has been our experience in recent years that, following fluctuations in production, trade has picked up again and shortages have then developed? This has meant an increase in steel imports, and it has also meant that as a result some of our people have been put on short-time working or have been made unemployed? Does he not agree that this process should not be repeated? I urge my right hon. Friend not to proceed with these redundancies, but to consider alternative policies, such as the stocking of steel and the sharing of work to keep the labour force together so that it can produce the steel in Britain for the time when trade again picks up?

Mr. Benn

My hon. Friend, who follows these matters closely, will remember that during the last steel recession in 1971–72 the BSC closed a good deal of its iron and steel capacity, including the plants at Skinningrove, Cargo Fleet and Redbourne. Those closures were important not only because they contributed to the steel shortage that occurred, but because they also led to a large increase in steel imports. Therefore, taking a long-term view, I have to bear those matters in mind. I confirm that the reports in the Press by the Chairman of BSC were correct and that they spread dismay. Although I am in favour of people speaking their minds—as I do—the morale and confidence of people who create the nation's steel is a most priceless asset and must not be squandered.

Mr. Teddy Taylor

Will the right hon. Gentleman say when he expects redundancies to happen? Is he aware that steel workers in Scotland are coming to the conclusion that they are now being manipulated in the bitter battle that is taking place between the Secretary of State for Industry and the chairman of a nationalised board?

Mr. Benn

My information is that steel workers in Scotland are glad that the statements about redundancy are being announced publicly. I have asked for assurances from the chairmen that nothing will be done until we have time to consider them. But consultations are now proceeding with individual unions, and the BSC will meet the TUC's Steel Committee on 19th May. Perhaps the hon. Gentleman will convey to his constituents in his steel industries that those concerned should not suffer because of decisions which have not been properly considered.

Dr. Bray

Is the right hon. Gentleman aware that the specific proposals by the Chairman of the BSC are more savage and economically ĩ than even the practices of the private steel industry before nationalisation?—and that is saying quite something. Is the Secretary of State aware that there is not a cat in hell's chance of steel workers in Scotland accepting these proposals, and will he say how the Chairman of BSC proposes to implement them?

Mr. Benn

It is best that discussions on these matters should be held in public, and by correspondence, if need be, between myself and the chairman, and that the House should have an early opportunity to discuss these matters. As for my hon. Friend's anxieties about the fear that the present recession might be used to pre-empt the outcome of the closure review, I have asked Sir Monty Finniston for an absolutely clear assurance that he will not pre-empt the outcome of that review.

Mr. Donald Stewart

Does the right hon. Gentleman accept that the Scottish steel industry rationalised its production before the last instalment of nationalisation? In view of the impending dismissal of 4,000 Scottish steel workers proposed by Sir Monty Finniston, does he agree that this is a further argument for the setting-up of a Scottish steel corporation? Does he accept that, because of the loss of confidence in him, Sir Monty Finniston should be asked to resign forthwith? Finally, will the Secretary of State, together with his colleagues, consider the necessity of appointing a Minister for nationalised industries so that queries regarding these matters can be raised on the Floor of the House?

Mr. Benn

I take note of what the hon. Gentleman has said. I must tell him candidly that the establishment of a Scottish steel industry—when that industry, like United Kingdom steel industry, would be controlled elsewhere—will not meet those problems. Under the Treaty of Paris the powers in respect of the steel industry were transferred in important respects. The best guarantee for the Scottish steel workers is that they should stay close to the steel workers in other parts of Britain and maintain their collective defence of their own interests.

Mr. Roderick

The Secretary of State will be aware of the strenuous efforts being made by so many in Ebbw Vale to co-operate according to the Beswick Report timetable. Is my right hon. Friend aware that those who reluctantly accepted that report will not accept these proposals, that they will be clamouring for rationalisation at the top of British steel management and that they will be right to do so?

Mr. Benn

I am aware that there is a view held by many people in steel plants that there is some overmanning at headquarters. I have heard that argument put. However, in response to what my hon. Friend says, I make no apology for taking seriously, at a time of rising unemployment, the possibility that steel workers may be dismissed.

Mr. Peyton

With this unceasing interference with industrial management, including that of the nationalised industries, does the Secretary of State think that he is grossly overrating his own abilities and, moreover, defeating the very objective which he has in mind of saving jobs?

Mr. Benn

As the right hon. Gentleman's own Government held up their investment programme for two years, drove the steel industry near to bankruptcy, and then handed power over to Brussels, he should not be speaking about that matter.

Mr. Duffy

Will the Secretary of State ensure that the Government lessen the human impact of necessary industrial change, where it is inevitable, by means of industrial retraining and the most generous redundancy payments? Will he say something about the effect of his announcement on the special steels division in Sheffield and the desirability of maintaining the present volume of investment there?

Mr. Benn

I am well aware of the special interest of my hon. Friend in the special steels division in Sheffield. He will know what efforts we have made to deal with this matter. I have maintained contact with those in Sheffield who are concerned with this, but there is no desire on the part of the Government to freeze the pattern of employment where history has left it. However, if we are to provide the possibility of shifting people from existing work there must be investment available to see that new work is there for them.

Mr. Thorpe

From the right hon. Gentleman's penultimate answer are we to take it that the Government officially regret that this country joined the European Coal and Steel Community?

Mr. Benn

No. I was describing the legal position under the Treaty of Paris.

Mr. John Davies

The right hon. Gentleman has described the legal position as it arises under the Treaty of Rome. Will he say a word in praise of the fact that the steel industry is currently borrowing on favourable terms very nearly £100 million from the Community institutions? Would he equally be prepared to consider with the Secretary of State for Scotland the wisdom, in the perspectives there are for the steel industry in Scotland, of having immobilised the Hunterston peninsula from use for other profitable and employing purposes so as to reserve it for the steel industry?

Mr. Benn

I think that the right hon. Gentleman's questions do not derive directly from the Private Notice Question which I am answering. Matters relating to Hunterston fall to the Secretary of State for Scotland as well as myself.

Dr. Bray

I beg to ask leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which should receive urgent consideration ; namely the plans of the British Steel Corporation, which were announced yesterday evening, to close steel works and to make 20,000 people redundant, with the heaviest impact falling on Scotland. First, the matter is specific. The Clyde Iron Works, the Clydebridge and Lanark shire open-hearth plants, the Clydebridge slabbing mill and the iron and steel-making plants at Shelton are specifically proposed by the BSC for closure.

Secondly, the matter is important. The numbers of men directly affected, the strategic rôle of the steel industry in the economy, and the principles involved in the relationship between Ministers and nationalised industries have led all the main national newspapers to give prominence to the matter and to carry leaders this morning and have resulted in a Private Notice Question this afternoon. Right hon. and hon. Members on both sides have made their representations as to the urgency of the debate. To those of us who are in close touch with the trade union representatives on the shop floor as well as at national level, it is clear that there will be incalculably damaging effects stretching far beyond the steel industry if the BSC goes ahead with its proposals.

Thirdly, the matter is urgent, since the BSC has said that it wishes to go ahead with its proposals this week. While the issue is specific, the actions taken by the BSC could be restrained by a general directive given by the Secretary of State.

Mr. Speaker

I am grateful to the hon. Member for having given me notice of his intention to make this application and also of the reasons with which he sought to sustain it. I have also heard the exchanges which took place today. I am, therefore, in the position of having to decide whether to give precedence to this matter over the business set down for today or tomorrow, when we are having a long-awaited defence debate. I cannot disrupt the business which has already been arranged. I am sorry that the answer must be "No".