HC Deb 12 November 1979 vol 973 cc880-2
3. Mr. Hooley

asked the Secretary of State for Industry what progress is being made by the British Steel Corporation towards the financial target of break even by March 1980, and if he will make a statement.

The Minister of State, Department of Industry (Mr. Adam Butler)

That is a matter for the Corporation, which will be making a statement at the end of November, when results for the second quarter are published.

Mr. Hooley

That is hardly an answer to my question. Is the Minister aware that the present state of demand within the United Kingdom, the EEC and the world generally makes the target totally impossible, and that it will lead only to the break-up of BSC?

Mr. Butler

The hon. Gentleman is aware that the target—indeed, a slightly tougher one—was set by the previous Labour Administration 18 months ago. It was picked up and renewed by my right hon. Friend. It was a tough target, but we believe that it is still attainable. Disputes such as the one at Hunterston have not helped in the attainment of the target. If there are any further industrial disruptions in the industry, clearly the target will become even more difficult to achieve. I ask the hon. Gentleman to use his influence to dissuade people from taking any action of that sort.

Mr. Michael Brown

Will my hon. Friend comment on the report yesterday that the Iron and Steel Trades Confederation was recommending the possible sale to private enterprise of Shotton and Corby?

Mr. Butler

I noted that report with considerable interest. I hope that it is supported by hon. Members on both sides of the Chamber. With regard to Shotton and Corby, the Government have made it clear that if a worthwhile private proposal is put forward that will not use public funds, they will not stand in its way. One of the problems in the industry is over-capacity, and that would have to be taken into account.

Mr. Homewood

Does the Minister agree that if BSC is unable to meet the target of breaking even by March next year that will bring into question all its credibility? If that proves to be the outcome, does he agree that there will be a strong need to investigate the management, especially to inquire into its competence, and a need to provide sustenance for the communities that will be destroyed?

Mr. Butler

The hon. Gentleman must await the six-monthly results, which will be available shortly. Ministers have confidence in the management of BSC.

Mr. Rost

Does my hon. Friend's reply mean that he denies the extraordinary press report over the weekend that the Government would try to oppose any sale back to private enterprise of plants likely to be closed?

Mr. Butler

I hope that I made a clear statement of the Government's attitude, to which I shall not add.

Mr. John Silkin

The hon. Gentleman's statement that the Labour Government had laid down a condition of viability by 1980 is totally incorrect. Will he tell us clearly and without evasion what his Government will do if BSC is unable to achieve viability by March 1980?

Mr. Butler

The first part of the right hon. Gentleman's question is a denial of the facts. The words of the then Secretary of State for Industry were reported clearly in Hansard in May 1978. That statement was repeated in the expenditure White Paper of January 1979. That cannot be in dispute. The target remains for the Corporation to be operating profitably in the next financial year.