HC Deb 09 March 1981 vol 1000 cc612-3
17. Mr. Bruce-Gardyne

asked the Secretary of State for Industry if he will make a statement regarding the progress of negotiations on Phoenix II on joint ventures in the steel industry.

Mr. Tebbit

Discussions between interested parties are at an early stage, but I am hopeful that an agreed proposal for a joint public-private sector company will emerge.

Mr. Bruce-Gardyne

Does my hon. Friend agree that if these birds are to rise successfully from the ashes it is essential that they carry with them the reputation to their customers of the private sector and not the reputation to their customers of the British Steel Corporation? If that is to be achieved, is it not essential that, in the interval, Mr. MacGregor is reminded that the way to fulfil the contract that was written with Lazard Freres is not necessarily to go round Europe trying to find the cheapest price, however ludicrous, and offering to undercut it?

Mr. Tebbit

I hope that when the new companies are formed they will carry with them the best of the reputations of both the British Steel Corporation and the private sector parts of the company. On my hon. Friend's second point, I regret to say that the state of the market in Europe in steel is still appalling, that widespread subsidies are being offered abroad, and that the price for steel is excessively low. To do something about that situation is the object of the discussions that I have had, and will continue to have, with other Ministers in Brussels.

Mr. Allen McKay

Does the Minister agree that, in the case of Phoenix II, the reputation for the quality of the product and output of firms in the public sector is among the highest in the world? Is he not aware of the fear that the private sector lacks the same output, capital investment and quality of British Steel in this group?

Mr. Tebbit

I am not sure that the chances of these companies being successful are enhanced by those who want to criticise one or the other of the prospective partners as not being up to the mark.

Mr. Emery

Will my hon. Friend answer the question that my right hon. Friend the Secretary of State said would be answered later? What thoughts are the Government giving to providing money for that part of the British Independent Steel Producers—BISPA—which is in competition with British Steel to enable these producers to stay in business and to compete with British Steel, considering the amount of money being given to the public sector?

Mr. Tebbit

Provided that a sensible market in steel can be restored in Europe as a whole and that subsidising can cease, I am sure that the future of private sector companies will be assured.

Mr. Hardy

Does the Minister agree that no matter how ill-informed or how enmeshed in dogma are Conservative Members, the fact is that the British steel industry, public, private, or hybrid, cannot succeed unless Government policies are dramatically changed? Will he ask his right hon. Friend whether he received information that might have convinced him of that fact when he visited Rotherham on Friday?

Mr. Tebbit

That is a fairly good example of dogma, prejudice, and ill-information springing to me from the Labour Benches. The hon. Gentleman must know that the problems of the steel industry spring primarily from Government subsidy of steel making—all Governments have done that over many years—and a resolute refusal on the part of many industries to respond in time to the need to change. We now face the need to make in a year or two changes that should have been carried out over a period of 10 years.