HC Deb 28 November 1977 vol 940 cc2-7
2. Mr. Crawford

asked the Secretary of State for Industry when he next intends to meet the Chairman of the British Steel Corporation.

12. Mr. Hodgson

asked the Secretary of State for Industry when he next expects to meet the Chairman of the British Steel Corporation.

13. Mr. Michael Marshall

asked the Secretary of State for Industry when he next expects to meet the Chairman of the British Steel Corporation.

24. Mr. Norman Lamont

asked the Secretary of State for Industry when he next plans to meet the Chairman of the British Steel Corporation.

The Secretary of State for Industry (Mr. Eric G. Varley)

I am in continuing contact with Sir Charles Villiers about the problem of the steel industry.

Mr. Crawford

Will the right hon. Gentleman condemn the BSC's cynical, deliberate and continued rundown of the steel industry in Lanarkshire and Ayrshire, which is throwing thousands of men out of work and causing them to lose their dignity? Is it not a total disgrace that Scottish oil revenues to the Government are now about £1,000 million a year yet no start has been made on an integrated steelworks at Hunterston? Given the succession of BSC's arrogant failures in Scotland, will the Secretary of State advocate the establishment of a Scottish steel corporation, answerable to the Assembly and funded from the Scottish oil revenues, which are required for the regeneration of the Scottish steel industry?

Mr. Speaker

Order. Will the Minister try to answer two out of those three questions?

Mr. Varley

It might be suggested that the hon. Gentleman was making crude political advantage for the SNP out of the difficulties of the BSC. In fact, over the last few years the Scottish division of the BSC has done remarkably well. It has received £120 million worth of investment out of a total investment by the Corporation of £579 million. That represents about 21 per cent. of investment while Scotland accounts for only 10 per cent. of the Corporation's steel-making capacity. Far from the BSC letting down the Scottish people, they have done very well indeed.

Several Hon. Members

rose—

Mr. Speaker

Order. I shall call first those hon. Members whose Questions are being asked.

Mr. Hodgson

Does the right hon. Gentleman accept that if the BSC is to achieve staffing levels in line with those of its major competitors it will have to shed 40,000 to 60,000 jobs? Will he therefore agree a programme with the Chairman of the BSC to improve productivity in order to reduce the appalling level of losses, which, together with the capital expenditure programme, account for 20 per cent. of the public sector borrowing requirement of the nation as a whole?

Mr. Varley

I am discussing all these matters with the Corporation and the TUC's steel industry consultative committee. I shall be meeting them again tomorrow.

Mr. Marshall

Can the right hon. Gentleman say what deadline he has set in trying to reach these crucial decisions with the Chairman of the BSC and the TUC committee? Is he aware that if he lets matters drift, on the Port Talbot and Shotton example, for more than a year, he will be doing a disservice to those who work in the industry and to the nation? Is he aware that if he thinks he can get past this issue in the spring and get up to the next General Election he is mistaken?

Mr. Varley

These questions are being discussed urgently with the BSC. I do not want to go further at the moment.

Mr. Lamont

I appreciate the difficulties of the world steel recession, but can the right hon. Gentleman tell us of any other national steel industry which has lost its domestic market share as quickly as has the BSC?

Mr. Varley

We have to ensure that we have a substantial, profitable and expanding British steel industry. It is unthinkable to do as some people, particularly some Conservative Members, suggest and to opt out of this pre-eminently manufacturing industry.

Mr. John Ellis

Will my right hon. Friend comment on the reports that British Steel is stopping all investment plans? Does he agree that it is vital to modernise this industry and that nowhere is that more important than in Scunthorpe, where we need to invest in blast furnace capacity to make iron?

Mr. Varley

There is no question of stopping British Steel's investment programme. The matter has to be dealt with urgently. There are serious problems, but investment will take place next year.

Mr. Hooley

To halt or defer the major investment programme of British Steel would have serious repercussions on other industries such as the plant makers. Will my right hon. Friend give an assurance that there is no question of cutting back this investment programme?

Mr. Varley

Investment in the BSC at the moment is the highest of any steel industry in Europe. Its purpose is to ensure that we have modern and efficient capacity. That is one of the problems. We face the problems of low-cost plants and the difficulties of high-cost plants, with which my hon. Friend will be familiar. I can give my hon. Friend this assurance: investment will take place in the British Steel Corporation next year. The level has to be decided.

Mr. Donald Stewart

Does the Secretary of State accept that the Scottish industry rationalised itself long before even the Benson Committee Report and that the industry, whether nationalised or not, ought to remain on a Scottish basis?

Mr. Varley

No, I do not agree. The BSC's problems have to be looked at in terms of the United Kingdom as a whole.

Mr. Donald Stewart

No.

Mr. Varley

That may be the right hon. Gentleman's view. It is not the view of Scottish steelworkers or those who represent them. Major investments have taken place in Scotland. There are the Hunterston ore terminal at £91 million, the direct reduction plant, Ravenscraig stage 3, and tube development. These are all taking place in Scotland. If the right hon. Gentleman examines the figures, he will not come to the conclusions he expressed just now.

Dr. Bray

Is my right hon. Friend aware that neither of the two hon. Members from the SNP who have questioned him on this matter represents steel workers? Those of us who represent Scottish steelworkers accept that the Government are facing a very difficult situation, and we rely on the Government both to maintain the investment programme and to provide alternative jobs where these can no longer be provided in the steel industry.

Mr. Varley

I thank my hon. Friend for putting the subject of Scotland into proper perspective. We shall take account of all that he has said in the discussions we are having with the Corporation and the TUC steel committee.

Mr. Biffen

Does the Secretary of State share the view of his right hon. Friend the Secretary of State for Trade that it would be inappropriate to raise the price of European steel, as is proposed by Commissioner Davignon, in view of the price weakness of the market?

Mr. Varley

That does not arise out of this Question, but I can tell the hon. Gentleman that the Government have no influence over the prices charged by the BSC. That power was given away when we entered the Common Market.

Sir K. Joseph

Will the Secretary of State answer the question put from this Box by my hon. Friend the Member for Kingston upon Thames (Mr. Lamont) and say whether any other national steel industry has lost as great a share of its domestic market as has the BSC? Secondly, does he agree that, however much money the taxpayer finds to save jobs in BSC, jobs will almost certainly be lost from employment elsewhere in the country as a result of the extra taxes raised for that purpose? Thirdly, does the right hon. Gentleman agree that nationalisation of the steel industry has made matters far worse than they otherwise would have been?

Mr. Varley

I cannot take up all the questions put by the right hon. Gentleman since I should incur your wrath if I did so, Mr. Speaker. On the question of the market share, I do not know the precise market shares held by steel industries in other countries. However, BSC has done extremely well in exports over the past few years. It is still a net exporter. We have to make sure that the BSC becomes profitable and that we secure the jobs of the majority of the people who work in the industry.