HC Deb 25 January 1982 vol 16 cc605-6
13. Mr. Whitney

asked the Secretary of State for Industry what is his estimate of the current daily cost to public funds of the operations of the British Steel Corporation.

Mr. Patrick Jenkin

During the current financial year the total external cash requirements of the BSC are estimated to average £2 million a day.

Mr. Whitney

Is not the future of the steel industry in Western Europe likely to lie largely with specialist and high grade steels? Does my right hon. Friend agree that the sooner we can staunch the haemorrhaging of the national wealth as revealed in the figures that he was kind enough to give, the sooner we are likely to establish an economy able to create long-term and viable jobs for British workers?

Mr. Jenkin

I am not sure whether I go the whole way with my hon. Friend. I agree that there is a great future for the parts of the steel industry that can add value to basic steel making and get high quality, high-cost products where they can secure viable markets. However, with the progress made by the BSC in improving the productivity of its plants and increasing their efficiency, and the help of the price increases to which I referred in answer to my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), I believe that there will be a long-term future for the BSC as a profitable and viable steel firm. Of course, there is no reason why it should be a public sector company.

Mr. Barry Jones

Is Britain not now in danger of having a steel industry that may be too small when the recession ends and domestic demand requires much more steel? Are we not in danger of being flooded with steel imports when the recession ends?

Mr. Jenkin

The information that I gave to the Select Committee on Industry and Trade was that the BSC is confident that it can meet a 20 per cent. upturn in the market without new capacity. That is quite a wide margin.

Mr. Kenneth Carlisle

Would not the cost of the BSC to public funds be much less if its sales could expand? Therefore, is it not worrying that the United States is considering restricting imports from Europe? Will my right hon. Friend do everything possible with his colleagues in the Government and in Europe to make certain that that does not happen?

Mr. Jenkin

My hon. Friend raises an important and disturbing issue. Full details of the anti-dumping and countervailing duty cases are yet to be received and assessed. I attended a meeting of Community Industry Ministers in Brussels on 13 January. We agreed unanimously that it was the United States recession rather than the volume or price of European exports that lay at the root of the American steel producers' problems. We therefore agreed that the members of the Community would work together to mount a robust defence against such action.

Mr. Crowther

Will the Secretary of State make it clear that no less than £209 million is being spent in the present financial year on closing production capacity and putting people out of work? Would it not be more sensible to spend public funds to revive the economy and keep people in jobs?

Mr. Jenkin

The hon. Gentleman knows a great deal about these matters and will know that, with the world recession and the downturn in demand for steel, which affects the whole of Europe, there must be rationalisation of production, and, regrettably, that means closures and the attendant costs in looking after the people concerned. It is part of Community policy that the rationalisation should be done fairly, and we get a certain amount of help from Community sources towards the cost.