SHOTTON STEELWORKS (Hansard, 13 July 1979)

§ The Secretary of State for Industry (Sir Keith Joseph)
The future of individual plants is a matter for the British Steel Corporation. The Government expect the Corporation to operate efficiently and commercially not only in the interests of the taxpayer but in the interests of the work force, the suppliers and users as a whole. It is for the management to make decisions about individual plants in the light of this, consulting the trade unions as appropriate.
Considerations of the social consequences of a closure, if decided upon, is for the Government, although British Steel Corporation (Industry) Ltd. will be active in the area. My noble Friend the Minister of State made an announcement on this matter yesterday.

§ Mr. Jones
There is widespread resentment in North Wales at the hole-and-corner way in which the news was made 881 available to us. Has not the Secretary of State overlooked the potential and grievous harm of this closure to the social fabric of Deeside, bearing in mind the loss of 6,000 direct jobs plus 3,000 indirect jobs, and taking into account the fact that of the 10,800 work force at Shotton steel more than 7,000 reside in my constituency? Is he aware, therefore, that the social consequences for Deeside can be devastating? Is not the Secretary of State taking an unwarranted and foolhardy risk in accepting the Corporation's assurances that it can, day in, day out over the years, transport 1.5 million tonnes of sheet steel from Scotland and elsewhere to Shotton's finishing mills? Does he not agree that if that supply falters the remaining 4,000 jobs at Shotton will be vulnerable?
What has become of the BSC chairman's statement in 1977 that Shotton steel make would be required for many years [...]o come? How will the Government, in the midst of an economic recession, deliver 9,000 new jobs to my shattered constituency? Is he aware that many men and women may be doomed to a decade on the dole if these measures go forward?
This is a sorry business. It will end in tears. The Government have made a squalid deal and, like Pontius Pilate, they are washing their hands of the interests of my people.

§ Sir K. Joseph
I do not underestimate the strong feelings of the hon. Member for Flint, East (Mr. Jones) or of many other hon. Members who are interested in this subject. There has been no squalid deal. If the British Steel Corporation does not become competitive, many more jobs will be at risk. Surely Labour Members have recognised that their attempt with the Beswick plan to defer adapting to the market has led to the need for greater changes in the event than had they allowed the original intended closures to go ahead. I do not advise the House to accept the figures quoted by the hon. Member for Flint, East. The precise result of the negotiations will emerge. It is for the BSC to make the decision.

§ Sir Anthony Meyer
Is my right hon. Friend aware that the ending of steel- 882 making at Shotton is a tragic mistake, whether it takes place at the end of this year or at the end of 1982, as it would almost certainly have done had Labour won the election? Is he aware that the closure of the steelmaking became inevitable from the moment that the final proposal to modernise the open hearth furnaces at Shotton was turned down last year? Is he further aware that the unemployment problem created in Clwyd by the closure will be incommensurate with any efforts that the Government have yet made to bring help to distressed areas? Lastly, is he aware that the problem is very intense and very local, and that it will require special measures?

§ Sir K. Joseph
My hon. Friend the Member for Flint, West (Sir A. Meyer) has throughout taken a consistent line on Shotton. I hope that the House will recognise that the steel industry has benefited, very largely at cost to the taxpayer, from the huge new investment that has been installed over recent years. It was started by the last Conservative Government, carried through by the recent Labour Government, and continued by the present Government. There are bound to be consequences from taking out the older works. The decision on which, when and how is for the British Steel Corporation.

§ Mr. James A. Dunn
Is the Secretary of State aware that the effect and consequences of Shotton closure will spread much further and wider than Clwyd and Deeside? It will spread into Merseyside. It will start at the docks, making equipment there redundant—I refer to the Bidston dock—and will follow through in a number of important ways. Unemployment consequences from the closure will also be felt on Merseyside. I dispute the British Steel Corporation's statement that Shotton cannot be made efficient and profitable. The attempt to do so has been started and we must give it time to succeed. That the Government are not doing; they are washing their hands of the responsibility.

§ Sir K. Joseph
My noble Friend the Minister of State yesterday made an announcement about the alleviation of social consequences, which the Government will consider if closure is decided upon.

§ Mrs. Kellett-Bowman
Does my right hon. Friend accept that if we are to maintain a viable steel industry in this country we must make full use of the new investment that has been made by British Steel? Does he agree that if old plants such as Shotton are not closed—it should have been closed many years ago—other people, such as those at Workington, who kept their side of the bargain and, at considerable cost to themselves, got rid of their old plant, will not benefit from the sacrifice that they made in the past?

§ Sir K. Joseph
I agree with the substance of my hon. Friend's proposition, but we all—and I particularly—should pay a tribute to the work that has been done at Shotton, and to the lives that have been spent in Shotton. I do that with great respect for all the people concerned. However, the facts of economic life have to be recognised. When an industry is modernised it is necessary to compensate for the new investment by taking out some of the old.

§ Mr. Alec Jones
Does the Secretary of State agree that when the chairman of the British Steel Corporation has given a categorical pledge to the work force at Shotton in 1977 that there would be no consideration of the proposal to close for five years and the pledge is broken, partly as a consequence of the Government's action, it is a scandal? Is the right hon. Gentleman aware that we expect more action from the Government to prevent this sort of thing taking place?

§ Sir B. Joseph
The chairman will be able to defend himself and to explain, but I understand that it was common to both sides of the House that the context and framework at the time that pledge was given was very different from what it is now. The recession had not bitten so deeply, and there were plans at that time to rebuild Port Talbot.

§ Mr. Ian Lloyd
Is my right hon. Friend aware that while many of us will endorse the important defence that he has made of the necessary discretion that the management of the British Steel Corporation must have in these circumstances, some weeks ago the European Commission published some most alarming figures showing that practically every tonne of steel manufactured in Europe last year cost every head of household 884 in Western Europe about £10 per annum? Is he further aware that there is a massive surplus of steel capacity throughout Western Europe? In these circumstances does he think that this very grave problem can be handled on a purely national basis?

§ Sir K. Joseph
There is enormous overcapacity in steel, and the British Steel Corporation is reacting to it as it judges best. That is its duty.

§ Mr. Speaker
Order. I shall call the three hon. Members who have been rising to speak and, of course, the Front Bench.

§ Mr. Skinner
Is the Secretary of State saying, in answer to the last question, that he is prepared to see intervention take place on a European scale, especially if it means that there will be redundancies, whilst at national level the Government will stand aside and allow this wreckage to take place? Is the right hon. Gentleman aware that the Government cannot just remove themselves from these responsibilities? It is already costing the taxpayer about £4,000 million to finance the dole queue. Will the right hon. Gentleman bear in mind that this steel question ranges far and wide—as far as Corby and many other places in the United Kingdom—and that he and his Cabinet colleagues have a duty to ensure that the dole queue does not mount in industries such as steel? Is he aware that if they do not do that they will reap the consequences?

§ Sir K. Joseph
The consequences of preserving industries larger than the consumers of the world will support will be longer and longer dole queues and a poorer and poorer country.

§ Mr. Leadbitter
Will the Secretary of State pay particular attention to the gravity of the present position and to the Government's reaction to this very serious problem? Is he aware that for two successive weeks I have asked for a steel debate, but that we have not had one? Is he further aware that he, as Secretary of State, has a moral duty, if not an economic one, to respond to the serious consequences that will fall upon huge communities? In Hartlepool a steelworks was closed down recently, and 885 male unemployment is still running at 16 per cent. Will he consider the extent to which that is a measure of the present problem?
Corby, Shotton and whole communities have a right to ask the Government why the BSC is losing its home market when this week East German steel, under Common Market licence, came into the country, in addition to Japanese steel? We have become virtually a steel-importing nation. Will the right hon. Gentleman respond and allow some discussion to take place in response to the reasonable approach to him of my hon. Friend the Member for Flint, East (Mr. Jones)? At least discussion is not beyond the right hon. Gentleman at this stage.

§ Sir K. Joseph
I do not for a moment underestimate the consequences of any decision to close that may arise from the consultations that BSC has initiated. However, I ask the House to accept that there are also consequences in paying to preserve jobs that do not represent the consumer's need in the United Kingdom. I ask the House also to recognise that the previous Government presided over a considerable number of steel closures. I accept Labour Members' strong feelings, but they must recognise that there is some hypocrisy in maintaining that all closures are reprehensible.

§ Mr. James Hamilton
Will the right hon. Gentleman take it from me that for Scotland, especially Lanarkshire, the information that we have received this morning is a body blow, bearing in mind that my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray), who will be in the House later, has a foundry under the BSC banner that is to remain open for only two more years? Is the right hon. Gentleman able to give me an assurance that I may convey to the people of Lanarkshire that the new mill that is urgently required in my constituency for the steel tube manufacturing industry will be granted by the Corporation? We all have doubts, bearing in mind that when the right hon. Gentleman took office he had a bitter detestation of publicly-owned industry. I trust that the social consequences will be borne very much in mind, having regard to the high unemployment figures in Scotland generally, especially Lanarkshire.

§ Sir K. Joseph
I cannot give the hon. Gentleman an answer to his detailed question, which is a matter for the Corporation. When the hon. Gentleman talks of Scotland, he should recognise that the closure of Shotton that is now proposed results partly from the great new investment in Scotland's steel industry.

§ Mr. Homewood
Will the right hon. Gentleman make a statement to deal with the rumours that are prevalent concerning the closure of the iron and steel works at Corby? When he makes that statement, will he remember that Corby was created by Government and the steel industry? If the closure takes place, there will be no benefit to the taxpayer, because the economic case is extremely dubious. Will he bear in mind that the town's industrial fabric will be utterly destroyed?

§ Sir K. Joseph
That is another matter, but the Government will watch carefully the progress of the negotiations that the Corporation has initiated on Corby.

§ Mr. John Silkin
Does the right hon. Gentleman understand that he cannot shrug off his responsibility and merely put the blame on BSC? It is his responsibility, because it is his policy and his Government's policy. In view of that responsibility, and in view of the firm commitment given by Her Majesty's Government in March 1977, when the chairman of the Corporation said that there would be no closure of Shotton during the five-year period from 1977, how can the right hon. Gentleman, as a man of honour, support a closure now?

§ Mr. Fell
Who made a pledge?

§ Mr. Silkin
It was a pledge made by the chairman of BSC and reinforced by the Government. Are Conservative Members saying that a question of honour does not arise, because although a pledge has been made by the chairman of the Corporation the Government are not prepared to underline it?
As for viability by March 1980, is it not time that the Secretary of State faced reality? Does he realise that the losses of BSC per tonne are very much lower than losses in the rest of Europe—for example, I believe that they are only half of those in France? How can he possibly force a straitjacket upon the Corporation at a time of world recession?

§ Sir K. Joseph
I am not trying to shrug off any responsibility. It was the Labour Government of the 1960s who nationalised the steel industry and put responsibility of management, including decisions on investment and closure, upon the BSC board. That is where it has lain ever since. It is true that the Government's proposal is to protect the taxpayer next year from bearing any revenue losses in the steel industry, but there will still be a huge call upon the taxpayer towards capital investment for BSC to complete its modernisation.