HC Deb 18 May 1981 vol 5 cc11-3
15. Mr. Fry

asked the Secretary of State for Industry if he will take steps to ensure that money provided by Her Majesty's Government to British Steel is earmarked only for purposes which have been announced to Parliament.

Mr. Tebbit

The Government already make clear to Parliament the general purposes for which funds are being provided to the corporation.

Mr. Fry

Is my hon. Friend aware that I have in my possession a copy of a document produced by the British Steel Corporation in 1979 which effects to show that the corporation was prepared to clear the extra bank loan of Corby Town football club merely to avoid the directors of that club having to face embarrassing charges? Is he further aware that one of the directors is the new Labour leader of Northamptonshire county council? Will he take steps to ensure that no such event can happen again?

Mr. Tebbit

I do not believe that in recent times the British Steel Corporation has given any such assistance. Certainly that is not its policy today. Like Stewarts and Lloyds, the town's main employer before the steelworks closed, the BSC has felt some social responsibility in the past to support the club. Some limited financial support was given then. None has been given for two years, and none is in prospect. I am sure that it would be wrong if it were.

Mr. Moate

Does my hon. Friend agree that British Steel Corporation money—that is, taxpayers' money—is going into the so-called Phoenix companies? Why should the taxpayers—the shareholders of the BSC—not know what cash resources will be available to the new companies?

Mr. Tebbit

My hon. Friend repeats a question that he put to me during the debate on Thursday evening. I gave him the reply then that these matters will become clearly known as the companies publish their accounts. No doubt my hon. Friend will seek to put the question to me again this evening, because he is a persistent man.

16. Mr. Chapman

asked the Secretary of State for Industry if he will make a statement on recent productivity trends and capital investment in the British Steel Corporation.

Mr. Tebbit

I understand that productivity in the corporation has been improving in recent months as a result of the continuing programme of manpower reduction coupled with a recovery in steel output from the low levels in the last quarter of 1980. As regards capital investment, the corporation has announced that this will be limited to the completion of schemes in progress and essential new items, at a cost of about £200 million in 1981–82.

Mr. Chapman

I welcome the increase in output per man in this country in recent months. How does steelmaking output in the United Kingdom compare with that in other European countries? On capital investment, does my hon. Friend agree that the higher the output the more public subsidy will be available for installing modern plant, which will lead to more output, higher wages and the need for less public subsidy to cover increased operational losses?

Mr. Tebbit

The statistics of individual steelworks show that the best of our works now match some of the best of Europe. I know that it is the ambition of many steel workers in the corporation, and also in the private sector, to match even what is achieved by Japan. I welcome the determination and the new attitude that have sprung up since the disastrous steel strike last year. I hope that before long new capital investment can be accomplished out of the profits of the industry and without any public subsidy. There is no point in requiring taxpayers indefinitely to subsidise loss-making activities.

Mr. Hardy

I am grateful to the Minister for his comments. Will he accept that the attitude of determination to achieve success in British Steel was established long before the steel strike, as he will ascertain if he examines the Rotherham position? Will he accept also that the position of British Steel and of the private sector would be a great deal better if the European Community did not expect a larger contraction in the United Kingdom than in any other steel-producing member State? Is he not aware that article 58 is unhelpful to the success of British Steel?

Mr. Tebbit

I must differ from the hon. Gentleman in almost every aspect of what he says. If the British Steel Corporation had been as competitive and as eager to succeed in the past as I believe most of its members now are we would not be in the process of passing legislation to write off £3.5 billion of debt.

Mr. Michael Brown

Will my hon. Friend take the opportunity, following his recent visit to my constituency, to congratulate both the unions and management on the strides that they have made in achieving some of the best productivity figures in the world at the Scunthorpe plant? Will he note the concern of many steel workers and managers at Scunthorpe that, in spite of all the investment made at the plant, there is some doubt, at a time of need for continuous casting, about the extent of capital funds that will be available for the project?

Mr. Tebbit

When I visited my hon. Friend's constituency and the steelworks there I was profoundly impressed with the attitude of all those employed at the works. I make no disinction between managers, who are workers, or chaps on the shop floor, who are workers. New capital investment must depend upon the financial results of the corporation and the prospects for getting a better market in steel in the European Community.

Dr. John Cunningham

Will the Minister of State reconsider his reply to my hon. Friend the Member for Rother Valley (Mr. Hardy)? Have not many of our best plants, in both the public and private sectors, in towns like Rotherham and cities like Sheffield, been undermined, regardless of their productivity or their record, because of the flood into the British market of subsidised steel products, particularly from the Federal Republic of Germany? Is there not a need for safeguards for even the best and most efficient of our steelworks? Does the hon. Gentleman agree that a commitment should be given to make sure that the present regime is continued until the market is sorted out?

Mr. Tebbit

I hope that the hon. Gentleman will not make it difficult for me to agree with him. If he had referred to subsidised imports flooding in from other European countries I should have found it easy to agree. The hon. Gentleman must understand that British taxpayers would be happy if they subsidised our steel industry only to the extent that German taxpayers subsidise theirs. The hon. Gentleman has picked on the wrong victim. The cause of the great flood into this country was not even the subsidy given by the Italians or the Belgians. It was the strike last year.