§ 16. Mr. Gryllsasked the Secretary of State for Industry what losses occurred at British Steel during 1980–81 and so far in the current financial year.
§ Mr. Patrick JenkinIn 1980–81 as a whole the British Steel Corporation incurred a pre-tax loss of £665 million. The loss for the first half of 1981–82 was £196 million. This reduction in the rate of loss is a welcome measure of the progress made by the corporation in its efforts to return to viability.
§ Mr. GryllsMay I ask my right hon. Friend whether BSC will break even in 1983, as the chairman forecast?
§ Mr. JenkinIt is difficult to make an accurate forecast because of the uncertainties of which my hon. Friend is well aware, not least the exceptional weather in January, which had a major effect on the plants in South Wales, and the effect of the American anti-dumping and countervailing duty cases. Nevertheless, I expect BSC' s losses in the second half of 1981–82 to be lower than those in the comparable period of 1980–81.
§ Mr. HooleyIs the Minister aware that, as a result of the massive investment of public funds in the modernisation of British Steel over the past 10 years, British Steel companies in Sheffield, for example, are now securing very important orders for North Sea oil equipment and rigs? Will he guarantee that the process of investment will continue and will not be cut off?
§ Mr. JenkinThe external financing limits of the British Steel Corporation provide substantial cash over and above that generated by depreciation provision by the company for capital investment. This is an important part of the rationalisation process in which the corporation is engaged. As I told the Select Committee when I gave evidence to it, the corporation is satisfied that it could increase production from 20 to 25 per cent. without any increase in capacity.
§ Mr. DickensIs my right hon. Friend aware that many of the multi-million pound contracts awarded to British industry have been won against the fiercest competition in the world? Will he accept that these contracts are now at the drawing board stage, and that details are being prepared which involve steel? Does my hon. Friend agree that this will produce work for the workshops and for the many subcontractors who rely on the industrial giants that have won the contracts?
§ Mr. JenkinYes, indeed, and I would go one stage further than my hon. Friend. Many of these very large contracts will have a substantial effect right down the line and help the medium and small business sector as well. The British Steel Corporation has itself obtained major contracts overseas—particularly the bank headquarters in Hong Kong—to the tune of many tens of millions of pounds, in the teeth of fierce international competition. The corporation is to be congratulated on that.
§ Mr. Campbell-SavoursIf it could be proved that decisions taken by Mr. Ian MacGregor as chairman of the British Steel Corporation, who has now been appointed for two years, were based on erroneous information provided to him by his board, would the Minister be willing to go to Mr. MacGregor and ask for an explanation why those decisions were taken?
§ Mr. JenkinThe hon. Gentleman talks in riddles. If he has any particular problem to put to me, no doubt he will do so.