Steel Industry (Hansard, 26 January 1976)

§ 1. Mr. Henderson
asked the Secretary of State for Industry if he will make a statement on the position of the steel industry.

§ 10. Mr. Teddy Taylor
asked the Secretary of State for Industry if he will make a further statement on the outlook for the steel industry in Scotland.

§ 16. Mr. Stonehouse
asked the Secretary of State for Industry if he will make a statement on the current state of the steel industry.

§ 17. Mr. Hooley
asked the Secretary of State for Industry if he will appoint 2 an independent commission to review the structure and operations of the British Steel Corporation.

§ The Secretary of State for Industry (Mr. Eric G. Varley)
As the House will know, the British Steel Corporation and the TUC Steel Committee signed on Friday a joint statement on reductions in employment costs and improvements in labour productivity. The unions recognised the need for reductions in manning levels, increased mobility of labour and other increases in labour productivity. The Corporation agreed to restore the status quo on premium shift working at those plants where a reduction in premium shifts has taken place since 4th January and an unresolved dispute exists. The unions undertook to ensure an immediate return to normal working at those plants.
The agreement represents a very encouraging move towards the target of an efficiently manned and competitive nationalised steel industry. I should like to congratulate both management and union representatives on their achievement and to pay tribute to them for the hard work they put into it.

§ Mr. Henderson
I welcome the good news that the right hon. Gentleman has brought to us about this agreement. However, is he aware that there is still considerable disquiet in the steel industry in Scotland? Is he aware that figures made available to me from within the British Steel Corporation indicate that 3 for the first 11 months of last year, compared with a similar period in 1974, production in Yorkshire and Humberside remained about the same, in East Anglia, the South-East and South-West it rose by 60 per cent., but in Scotland there was a reduction of 25 per cent. in orders placed with steel plants? Will he investigate the matter and inform the Corporation that Scotland expects its fair share of steel business?

§ Mr. Varley
As I told the House on 6th August, the Scottish steel industry will be more balanced and competitive when announced changes have been carried through. I do not think that it has escaped the notice of hon. Members that the Corporation is having to suffer the worst industrial recession for 40 years, but I will look into the point raised by the hon. Member.

§ Mr. Taylor
Is the right hon. Gentleman aware that morale in the Scottish steel industry is particularly low because of the uncertainty that has gone on for so long and because so many people in the industry do not know what the future will bring? In the light of the agreement at the weekend, can the Secretary of State say how many job reductions were called for in Scotland and what will happen if agreement cannot be reached at plant level about the scale of redundancies hoped for by the Corporation?

§ Mr. Varley
I very much agree with what the hon. Member said in the first part of his question. I regret that the development plan was not pushed through in 1970 after it had been agreed by the previous Labour Government. It was a matter of great regret to me that for two years the industry was not allowed to get ahead. I do not want to underestimate the great difficulties facing the industry. It will certainly be a long time before we get the internationally competitive industry that we all want to see. The scale of redundancies will depend to a great extent on how the negotiations go at plant level and between the Steel Committee and the Corporation.

§ Mr. Stonehouse
To what extent will the agreement reduce the current weekly losses of £8½ million?

§ Mr. Varley
Substantial progress will take place and there is a realistic possi- 4 bility of the Corporation's achieving its cost-savings target. I want to be cautious and not over-optimistic, but major savings will be achieved when the upswing in the economy takes place and the steel industry can get back to full capacity.

§ Mr. Heseltine
The right hon. Gentleman was asked for specific figures. Is it not very difficult for him to welcome the agreement unless he has some idea of the figure of cost savings that will result from the agreement? Did both sides agree the productivity comparisons, which were attached to the agreement but which were not necessarily part of it?

§ Mr. Varley
I cannot read out the agreement in full, but I can read the first sentence of the document, signed by the whole TUC Steel Committee. It says: Both the British Steel Corporation and the unions concerned believe the Corporation should be transformed into a profitable, high wage, high productivity industry, comparable to its major European competitors. One cannot be precise about figures, but the Corporation has told me that if the present agreement is implemented—and joint negotiations have to take place—it expects to achieve its target of £170 million cost savings. The hon. Member will know that since discussions took place in May and July last year, considerable savings have been made, but more needs to be done.

§ Sir G. de Freitas
Will my right hon. Friend encourage those concerned with the industry to refer at all times at the end of negotiations to settlements or agreement and never to victory or defeat?

§ Mr. Varley
My right hon. Friend is absolutely right. There has been great effort on both sides to achieve real cost savings and there is now a wide understanding within the industry and among those who give their lives to it that there must be savings and that they must be carried through humanely. Everyone should have a vested interest in harmonious, constructive industrial relations.