British Steel Corporation (Hansard, 27 February 1978)

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

§ 9. Mr. Tim Renton
asked the Secretary of State for Industry when he expects next to meet the Chairman of the British Steel Corporation.

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

§ 15. Mr. Adley
asked the Secretary of State for Industry when he next expects 2 to meet the Chairman of the British Steel Corporation.

§ The Secretary of State for Industry (Mr. Eric G. Varley)
I shall be meeting Sir Charles Villiers later this week.

Several Hon. Members rose
—

§ Mr. Speaker
Order. I shall follow my usual custom of calling first those hon. Members whose Questions are being answered with Question No. 1.

§ Mr. Crawford
I realise that I am opening something of a Pandora's box with this Question, but may I say to the right hon. Gentleman that I certainly do not—

§ Mr. Speaker
Order. The hon. Gentleman has the first supplementary question. Will he set a good example and ask a question?

§ Mr. Crawford
Without sharing the synthetic indignation of the Conservatives over the difficulties which the Secretary of State is experiencing over BSC—my party has a certain amount of sympathy with him over the Conservatives' hypocrisy in this matter—may I ask him to give a categorical assurance that a start will be made by 1980 on the fully integrated steelworks at Hunterston, and will he also give reassurance to the 1,300 men facing the stark prospect of redundancy at Glengarnock, in central Ayrshire?

§ Mr. Varley
As I have told the House on previous occasions, the problems of the British Steel Corporation are being examined urgently within the Department, in consultation with the BSC and the work force. Uppermost in our minds are the consequences in social considerations in Scotland and elsewhere. I can give the hon. Gentleman the assurance that the impact of any closures in Scotland will be taken fully into consideration, especially as they affect Glengarnock.

§ Mr. Renton
Does the right hon, Gentleman recall that he was in the Chamber during the opening speech by the Minister of State in our debate on 22nd July on increasing the British Steel Corporation's borrowing powers? Why did he not intervene when the Minister of State said that The hope is that the upturn that is taking place will assist the Corporation."—[Official Report, 22nd July 1977; Vol. 935, c. 2136.] since, as we now know, the chairman of the Corporation had told him four days before that there was no upturn?

§ Mr. Varley
I think that we shall be discussing at some stage the Select Committee's report. The Government are giving it urgent consideration and will report in the usual way and follow the practice of all Governments.
The hon. Gentleman fails to understand the report that the British Steel Corporation submitted to the Select Committee from the independent auditors, Messrs. Coopers and Lybrand, in which the senior partner Mr. R. L. Emmitt—[HON. MEMBERS: "Answer the question."] If hon. Members will be quiet, I shall try to deal with the question.
Mr. Emmitt said: In my view, having regard to the status of this finance paper, it would have been misleading at that stage to have based any published announcement on the figures in that paper. … It is easy, with hindsight, to argue that more might have been said, but I do not think it realistic in all the circumstances to have expected that you could have said more than you did at the time, pending completion of the detailed assessment of prospects which was then in hand. I can tell the House that on every occasion we have been utterly forthright with the House and with the Select Committee.

§ Mr. Gow
Is it not clear that the financial forecasting of the British Steel 4 Corporation and of the Department of Industry has been grievously erroneous to the point of negligence? Is it not also true that the failure of the Government to take action about the BSC has been governed by political and not by industrial considerations?

§ Mr. Varley
Conservatives fail to understand that whole communities in Scotland, Wales and England are affected by steel and steel closures. If I had done as the hon. Gentleman suggests and, three and a half months into this financial year, arbitrarily wielded the axe of closure to eliminate the deficit, it would have resulted in massive redundancies, and I do not think that even some Conservatives would have been happy with that.

§ Mr. Adley
In that case, why did the right hon. Gentleman not come to the House and say that the extra £1,000 million was for social reasons and had nothing to do with industrial reasons? If that were the case, would it not have been more honest and straightforward to say so? Otherwise, we are left with the impression that either it was wishful thinking by the Government that the British Steel Corporation was doing well or the right hon. Gentleman tried to deceive the House. Is there no level at which any Minister of this Government would resign if he thought he had done a bad job?

§ Mr. Varley
The hon. Gentleman misunderstands the position, and he has come late to this argument. Today, the Financial Times, which I do not usually quote in the House, states that "these procedures"—the internal reporting procedures— appear to have signalled danger as quickly as could reasonably be expected in a fast moving situation which caught steel makers everywhere off their guard. The hon. Gentleman should know that political commitments were entered into by the Labour Party before it came into office. I have never sought to hide that. On Glengarnock, for example, there was the Beswick review. We said that that closure date should be altered and that there should be an extra one to two years of life. At Shotton we said there should be an extra two to three years' life. Subsequently that was withdrawn to give it an indefinite period. In the case of East Moors, there is to be an extra four years. 5 They were political commitments which I have not sought to disguise from the House. If those, political commitments are to be set aside, it will be only as a result of discussions with the trade unions concerned.

§ Mr. Roy Hughes
Does my right hon. Friend agree that some of us have for a very long time been saying that the administration of the BSC left much to be desired and that a more constructive scheme of worker participation plus greater accountability to the House was needed? Does he further agree that the difficulties facing the steel industry are common to all Western industrialised countries at the present time and that we should guard against those who are using the situation to undermine the whole principle of public ownership?

§ Mr. Varley
I agree that we have to develop a system of industrial democracy within the British Steel Corporation. We shall do that as quickly as we can. This situation is not peculiar to the British steel industry. Every steel industry of a comparable size with product performance throughout the world is losing money. We cannot insulate our steel industry from the world-wide situation. We are dealing with the problem as sensibly and humanely as we can.

§ Mr. Robert Hughes
My right hon. Friend lays great store by worker participation and consultation. Will he therefore discuss with the Chairman of the BSC the position reported to us by Bill Sirs of the Iron and Steel Trades Confederation about changes in work practice and other procedures at Glengarnock?

§ Mr. Varley
I have not seen the statement that has been put out today by the general secretary of the Iron and Steel Trades Confederation, but I saw the statement that he put out as chairman of the TUC Steel Committee on Friday in which he said that there was trade union support for the line that the Government had taken so far. I think that that goes for the Scottish TUC as well.

§ Mr. Norman Lamont
Will the right hon. Gentleman answer the question posed by my hon. Friend the Member for Mid-Sussex (Mr. Renton): why, on 22nd July, did the Minister of State say that the upturn that was taking place would help the Corporation when four days previously 6 Sir Charles Villiers had told him that he was bound to say that he saw no sign of an upturn?

§ Mr. Varley
The evidence that was given to the Select Committee showed that the British Steel Corporation told us on 18th July that there could be a loss of between £250 million and £350 million. Sir Charles Villiers said that he could not see an upturn, but he believed that he could hold the figure below that. At that time, 18th July, three and a half months into the financial year, with the Germans and the Japanese trying to get a price increase—and a 10 per cent. price increase on British steel products is equivalent to £300 million—if the Government or the BSC had arbitrarily said "Let us get rid of that deficit", it would have meant arbitrary closures of eight old plants and perhaps one modern plant, with about 46,000 redundancies. That would no doubt have pleased the Opposition.

§ Mr. Heffer
Is my right hon. Friend aware that some of us, having carefully read the Select Committee's report, have come to one conclusion: that my right hon. Friend is accused of the crime of carrying out the Labour Government's policy of trying to save redundancies in the steel industry and of concerning himself with the policy laid down in the Labour Party's manifesto? Is it not clear that Conservative Members—unfortunately, by a slight aberration, I fear, to some extent assisted by some of my colleagues—are taking their usual hypocritical position, on the one hand, of saying that the Government should agree to massive redundancies and unemployment and, on the other hand, of accusing the Government of creating unemployment? The lot of them are hypocrites.

§ Mr. Varley
My hon. Friend is right. In 1973, before we came to office, we said that we would review the then closure dates announced by the Conservative Government. That is what we did on two occasions, and those dates were announced to the House. The hon. Member for Honiton (Mr. Emery), who was a Minister, nods in agreement.

§ Mr. Emery
It is disastrous.

§ Mr. Varley
It is a matter of opinion whether it is disastrous. If we were to change those dates, it could only be on the basis of the negotiations now taking 7 place. Some progress has been made. Once those commitments were made, they became our commitments and we had to honour them. If we want to vary them, we can do so only by discussion.

§ Sir K. Joseph
I am sure that no one pretends that the Secretary of State's job is easy, but he takes pride in being the guardian of the Beswick Report. Is he not also the guardian of the taxpayers' and the country's interests? What is his position if the two commitments conflict? The Secretary of State has had three reports from the Select Committee and an appendix, all of which were unanimous. There are grave charges in the reports. Is he aware that we are with him in wishing that he and his right hon. Friends should take the earliest possible opportunity of meeting those charges? Therefore, is he in favour of urging his right hon. Friends in the Government to devote two days to a debate on the Select Committee's unanimous findings? If so, we shall, of course, support him.
Will he answer my hon. Friend the Member for Mid-Sussex (Mr. Renton) and my hon. Friend the Member for Kingston upon Thames (Mr. Lamont) by meeting the charge that the Minister of State referred to an upturn that was taking place—

§ Mr. Speaker
Order. The right hon. Gentleman is taking advantage of Question Time. I have allowed longer than usual on this matter because four Questions are being answered together. Perhaps the right hon. Gentleman will come to a conclusion.

§ Sir K. Joseph
Will the Secretary of State answer the charge that the Minister of State referred to an upturn that was taking place and misled the House when he knew that an upturn was not taking place?

§ Mr. Varley
My hon. Friend did not mislead the House on that occasion. What is more, in the debate—the right hon. Gentleman can check it—the hon. Member for Mid-Sussex (Mr. Renton) said that his answer on the upturn was an honest answer at that time.

§ Mr. Renton
I did not know then what Sir Charles Villiers had said four days before.

§ Mr. Varley
As regards a debate, the right hon. Member for Leeds, North-East (Sir K. Joseph) was in the House last week when the question was put directly to my right hon. Friend the Leader of the House. It is customary, and it was customary when the right hon. Gentleman was a senior Minister, for reports to be considered by the Government and for the answers to be given in the normal way in a White Paper. I shall be making a statement before the House goes into recess on the financial and other prospects for the British Steel Corporation. In al probability there will be a debate on the legislative proposals that we shall lay before the House immediately after the recess.