HC Deb 10 April 1978 vol 947 cc947-51
1. Mr. Neubert

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

3. Mr. Richard Page

asked the Secretary of State for Industry when he next expects to have a meeting with the chairman of the British Steel Corporation.

9. Mr. Nelson

asked the Secretary of State for Industry when he next expects to have a meeting with the chairman of the British Steel Corporation.

22. Mr. Michael Marshall

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

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

I keep in frequent contact with the chairman, whom I last met on 5th April. There is no firm date for the next meeting.

Mr. Neubert

Is it not its poor productivity performance, which is particular to us and is not due to the world recession, which puts the British steel industry at an extra disadvantage as compared with those countries which have an excellent record of reducing manning levels? Will the right hon. Gentleman give support to the proposed incentive scheme offering more pay for more output?

Mr. Valley

I do not think that the hon. Gentleman would want to give the impression that the problems of the British Steel Corporation are unique to the Corporation. There are major world factors. Along with my colleagues, I am giving support to the productivity changes in the Corporation and to the incentive proposals.

Several Hon. Members rose

Mr. Speaker

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

Mr. Page

When the right hon. Gentleman next speaks to the chairman of the BSC, will he impress on him the necessity to invest in winners and profit earners, such as the plant at Workington, and ensure that the investment in the new coking ovens there should be carried out as soon as possible? Will he recognise that, while there are surpluses in coke at the moment, with other plant closing down it is essential that these plants at Workington start up immediately? Will he therefore tell us whether the investment is to go in and, if so, when?

Mr. Varley

I have not attended to this matter personally, but I have asked for these factors to be drawn to the hon. Gentleman's attention. For example, I understand that the existing coke ovens will remain in operation. The Corporation has told its work force that the scheme to rebuild the coke ovens at Workington is to be deferred at the moment but will be reviewed in mid-1979.

Mr. Nelson

Following the thoughtful and welcome White Paper last week on the nationalised industries and the change in his relationship with the chairman of the board of the Corporation, does the right hon. Gentleman expect the Government—and, if so, when—to bring forward an announcement of a financial target for British Steel? Does not he agree that it is sadly wrong that the Corporation should not have a financial target, bearing in mind that nearly all the other nationalised industries have such targets statutorily applying to them?

Mr. Varley

The relationship between the Corporation and the Government is a good one. I have paid tribute to the work that Sir Charles Villiers and the management have done over the last few weeks. There is a particular problem over a financial target for British Steel. I made it plain in my statement to Parliament on the publication of the White Paper that we would be looking at the possibilities of capital reconstruction when the market situation became more certain, and in any event I shall be laying legislative proposals before Parliament very shortly.

Mr. Marshall

When will the right hon. Gentleman and Sir Charles Villiers agree the text of the Government's reply to the various reports on steel by the Select Committee on Nationalised Industries? Does the right hon. Gentleman recognise, after his perhaps rather ill-tempered start, that there are many recommendations that he himself has described as useful and which require urgent decision and debate, particularly such matters as manning agreements?

Mr. Varley

I never lose my temper. On the basis of the Select Committee's report, we are working on our reply over the next few weeks. I expect that that reply will be published in the usual form, that is, as a White Paper. It will be published and laid before Parliament in time for debate on the legislation I have just referred to.

Mr. Roy Hughes

Will my right hon. Friend confirm that the Government are fully committed to saving the British steel industry whereas the Conservative Party, with its persistent sniping, seems quite happy for it to go to the wall? Will he note the response of the work-people to the Government's lead—for example, at Llanwern, which is breaking all records at present? Will he consider visiting that plant in the near future in order to show his appreciation to the workpeople involved?

Mr. Varley

I join with my hon. Friend in saying that the measures announced by the Government have saved the British steel industry. If we had not taken the action we took, the position would be much more serious. We have to get ahead with the modernisation of British Steel and make sure that we have a substantial steel industry capable of meeting the needs of British manufacturing industry.

Mr. Hardy

Will my right hon. Friend remind Conservative Members who take an excessively critical view of many sectors of British industry, particularly the public sector, that the British steel industry today is affected by world developments? Will he confirm that the British steel industry is operating nearer to capacity than the steel industries in Europe, and perhaps even the steel industry in Japan?

Mr. Varley

I think that that is broadly correct. In fact, most steel industries throughout the world of comparable size to British Steel, whether privately owned or publicly owned, are in some difficulty. We shall ensure that the British steel industry remains substantial, and we want to get it back to viability and profitability as quickly as possible.

Mr. Patrick McNair-Wilson

Is the Secretary of State aware that the chairman of the British Steel Corporation has written to me saying that he is prepared to consider the sale of complete steel plants in closure areas? Will he, when he next meets the chairman, ask him to enlarge upon this scheme? Will he give his Government's full backing to this policy and make sure that no restrictions are placed in the way of these plants if they are sold to private enterprise?

Mr. Varley

I do not know of any proposals and I do not know of the correspondence between the hon. Gentleman and the chairman of the British Steel Corporation. Any requirement to dispose of assets would have to come through the Government, and we should want to look at it extremely carefully.

Mr. Hooley

Has my right hon. Friend discussed with the chairman of BSC the impact on the steel plant making industry of the cut in the investment programme, especially as it may affect Sheffield?

Mr. Varley

I have not discussed the investment programme with the steel plant manufacturers, but my hon. Friend will be aware that substantial investment will take place over the next two years—in the region of £1,000 million. I know that that will be broadly welcomed by the steel plant makers, but if they want to make representation to the Government we shall be pleased to receive it.

Mr. Norman Lamont

Is the Secretary of State aware that we welcome the slimmed-down investment programme in this halfway stage to a sensible policy? But is it not the case, as the Select Committee pointed out, that if action had been taken earlier we should have been able to afford more modernisation and more investment, and that there would have been a greater degree of job security?

Mr. Varley

That is one section of the report of the Select Committee with which I do not agree. It is implied in some quarters that the Government, on internal financial forecasts for the British Steel Corporation, could have taken action within one or two months of the last financial year. To have eliminated the forecast at that time would have resulted in action which would have been unacceptable, I think, to the majority of those who work in the steel industry and, I suspect, to the majority of hon. Members.

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