HC Deb 02 April 1979 vol 965 cc925-8
10. Mr. Gow

asked the Secretary of State for Industry to what extent the number of employees in the British Steel Corporation fell during the 12 months ended 31 March 1979; and to what extent he expects the number to fall during the year ending 31 March 1980.

Mr. Varley

I understand that the latest available figures show that during the 11 months to the end of February 1979 the number of people employed by the British Steel Corporation fell by some 10,800. Future levels of employment are a matter for the Corporation and the unions concerned.

Mr. Gow

To what extent does the Secretary of State consider that there is overmanning in BSC, and to what extent does he have in mind that it will be reduced during the coming 12 months?

Mr. Varley

I have already indicated once to the House this afternoon that the Government's policy was set out in the White Paper "British Steel Corporation: the Road to Viability", where we hoped that the Corporation could reach a break-even position by 1980–81. We must take into account the new capacity coming on stream at Ravenscraig and Redcar. There will inevitably be some closures, but only on the basis of paragraph 15 of the White Paper, in discussion with the TUC steel committee and the local trade unions concerned.

Dr. Bray

Is my right hon. Friend aware that with the increase in steel output at Ravenscraig there will be no significant increase in employment, that no industry in Britain is giving more attention to manning questions than the steel industry, that there has been an enormous advance in the industry's joint consultative procedures in securing the success that has so far been secured and that it is continuing?

Mr. Varley

I am grateful to my hon. Friend. I do not disagree with anything that he said. With all the difficulties that we have had with BSC over the past few years, the most significant factor is that we have been able to maintain a very high level of investment—about £2,000 million since 1974, with another £500 million or so this year, and perhaps the same amount next year.

Mr. Michael Marshall

The Secretary of State referred to breakeven in 1980–81. Can he confirm that demanning is proceeding on an agreed basis which will lead to breakeven by March 1980, the latest official target that we have been told about?

Mr. Varley

The hon. Gentleman, who follows the Corporation's affairs extremely closely, knows that we want to take this matter on a step-by-step basis. I have always set my face against rigid figures and targetry. That was absolutely wise. If I had said that by such-and-such a date so many people must leave the Corporation we might have had the same situation in this country as there was in France a few weeks ago, with steel workers marching and getting their heads broken. Fortunately, we have been able to avoid that.

Mr. Hardy

Will my right hon. Friend remind those Conservative hon. Members who seem to know nothing about the industry that BSC has made strenuous efforts to achieve the success which it will experience within a relatively short time? Will he remind them that companies such as Italsider and Sacilar in Europe have piled up much greater losses per tonne than BSC, that the problem is due to inadequate world demand for steel, that that is perceived in the rest of Europe, and that that suggests that the rest of Europe and perhaps those of us on the Labour Benches are rather more intelligent than some Conservative Members?

Mr. Varley

There are some great success stories in BSC, as any objective analysis of its programme can verify. For example, at Thryborough and Temple-borough, very close to my hon. Friend's constituency, there is a great success, particularly the bar mill there. Even with all the difficulties over the past few years, the country is still a net exporter of steel.

Mr. Norman Lamont

Will the Secretary of State confirm—or deny—press reports that he and his right hon. Friend the Secretary of State for Energy are seeking to interfere with BSC's choice of coking coal for Redcar? Does he agree that, given the precarious state of BSC's finances, it should be given complete commercial freedom to place its orders where it wants?

Mr. Varley

I can confirm that my right hon. Friend and I are looking very closely at the Corporation's coking coal provision. That does not mean that the National Coal Board, my right hon. Friend or I want to place in jeopardy the proper commissioning of the Redcar blast furnace, but there are wider issues involved which we as a Government must take into account, and are expected to. These are impact on our balance of payments of importing coal, the social impact on some of the areas concerned and the impact on the finances of not only BSC but the NCB. Therefore, we shall be looking at the matter very closely, and we hope very soon to make an announcement about importing coal.