HC Deb 09 March 1981 vol 1000 cc599-600
1. Mr. Hooley

asked the Secretary of State for Industry what progress is being made with the reconstruction of the British Steel Corporation and its involvement with the private sector of the steel industry.

The Secretary of State for Industry (Sir Keith Joseph)

I welcome the recent announcement by the British Steel Corporation and Guest, Keen and Nettlefolds of an agreement in principle to form a new joint company, Allied Steel and Wire Limited. I hope to receive further agreed proposals for other public sector—private sector joint companies in the other Steel-making sectors where there is overlap.

Mr. Hooley

Is it not outrageous that the trade unions concerned were given one hour's notice of the so-called Phoenix I reshuffle? Will the right hon. Gentleman give a categoric assurance that there will be widespread consultations with the engineering, steel, electrical and all the other unions involved before we get mixed up in this ideological Phoenix II reshuffle?

Sir Keith Joseph

No, I am afraid that I cannot. Delicate commercial negotiations between the nationalised steel industry and private companies were involved. I fear that the jobs of many people might be jeopardised if there were widespread consultation.

Mr. Emery

Can my right hon. Friend give the House any further information about the negotiations with regard to Phoenix II? Secondly, what consideration are the Government giving to providing funds for the private sector in order to keep jobs and businesses in operation, bearing in mind the immense amount of money being given to the public sector?

Sir Keith Joseph

My hon. Friend is asking questions that are on the Order Paper and will arise later. I am assured, however, that the preliminaries for negotiations with regard to Phoenix II will be set in hand very soon.

Mr. Orme

In supporting the point made by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) with regard to consultation, may I ask the Secretary of State what other action he will take to support the private sector? I visited Firth Brown in Sheffield on Friday. That company is in a desperate situation with regard to financing. It is also a large provider of steel to the British Steel Corporation. Can the Secretary of State give some firm assurance of help to the private steel sector at the present time?

Sir Keith Joseph

My understanding is that 80 per cent. of the private steel sector is not in competition with the British Steel Corporation and is therefore being affected very harshly by the precipitate fall in steel prices in the whole of Western Europe. To the extent that there is overlap, the Phoenix concept, while preserving fierce competition from overseas, is intended to optimise the survival of jobs in steel.

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