HC Deb 12 July 1982 vol 27 cc631-2
6. Mr. Lennox-Boyd

asked the Secretary of State for Industry what effect the United States Government's imposition of duties on the imports of subsidised steel has had on the British steel industry.

14. Mr. Teddy Taylor

asked the Secretary of State for Industry what effect the United States curbs on imports of steel from the United Kingdom will have on the plans of the steel industry.

Mr. Patrick Jenkin

The effects of the unjustified discrimination against the British Steel Corporation's steel exports to the United States of America are potentially very serious but are not readily quantifiable. We are making intensive representations direct to the United States Administration and are fully supporting European Community initiatives to find an acceptable solution.

Mr. Lennox-Boyd

Bearing in mind the very cheap energy costs—well below world market prices—that have been enjoyed by United States industries for many years, does my right hon. Friend agree that the United States Government's action smacks at least of double standards? Does he further agree, however, that there is a lesson to be learnt from these difficulties about the pitfalls of subsidising any industry that has to operate in an international market?

Mr. Jenkin

My hon. Friend makes a valid point about American energy prices, at least in so far as "old gas" is concerned. With regard to subsidisation, a vast amount of the money that has gone into British Steel has been used to increase investment, to rationalise the industry and to allow the closure of outdated plants and the modernisation of capacity—a process that Mr. Baldrige, the United States Secretary for Commerce, actually praised in his evidence to a Senate Committee.

Mr. Teddy Taylor

Is it reasonable for us to expect the Americans to allow substantial increases in imports of highly subsidised steel when the Common Market imposes rigid controls on imports and insists that they must remain at the traditional levels, which are the levels of 1976? Would it not help the Government's case greatly if we gave an assurance to the world that the British Steel Corporation will not dump steel abroad at prices well below those that our home manufacturers have to pay?

Mr. Jenkin

I dispute the charge that British Steel has been dumping steel in the United States of America. The duties that have been provisionally fixed are countervailing duties based on a calculation of subsidies which neither the British Steel Corporation nor Her Majesty's Government accept. That is precisely what the discussions are about. We are trying to reach a sensible solution. We understand the problems of the American steel industry, but they are due overwhelmingly to the fall in demand for steel in America and only marginally to imports of steel from Europe.

Mr. Roy Hughes

Has the Secretary of State noticed how zealous the Americans are in protecting their industries? Why do we not sometimes take a leaf out of their book, or would such a proposal be vetoed by Viscount Davignon? Will the Secretary of State also take account of the high productivity figures that are now being recorded by the British Steel Corporation when there is still speculation about major redundancy schemes ahead?

Mr. Jenkin

The hon. Gentleman will no doubt wish to make his first point direct to Mr. Baldrige, which, I am sure, will be well taken.

I have had no proposals from the British Steel Corporation for any further major rationalisation of its production. I am full pf praise and have said many times that the improvements in productivity at the British Steel Corporation's works have been quite outstanding and trust be maintained. I am not sure that I can help the hon. Gentleman any further with regard to the future.

Mr. Wrigglesworth

Does the Secretary of State agree that this illustrates the danger of introducing import controls into any sector of the economy at such substantially high levels? Will he draw to the attention of the American Government the widespread support in the House for the action that he is taking in seeking to oppose the levies that they have introduced? Will he make it clear to them that in the steel areas of Britain enormous sacrifices have been made which have led to the introduction of much higher levels of productivity throughout the British Steel Corporation?

Mr. Jenkin

As I have already said, those developments have been praised by the American Administration and are well known, but I welcome what the hon. Gentleman said about support for our opposition to these undeserved charges.

Mr. Moate

Could not my right hon. Friend express more understanding for the American industry and Government? Surely it is unrealistic to believe that we can go on massively subsidising the public sector steel industry in this country and in other parts of the Common Market without it having a serious adverse affect on our competitors abroad and on the unsubsidised private sector in Britain?

Mr. Jenkin

My hon. Friend is entitled to his view, but I must remind him that I am the Secretary of State for British industry.

Dr. John Cunningham

Is the Secretary of State aware that we much welcome his strong and firm statement about British steel exports to the United States of America, but that he will be judged by the outcome of his actions in that regard rather than by what he said today? Does he agree that the capital reconstruction of the corporation carried through by the Government and the major sacrifices that have been made in closures, rundowns and jobs losses will be rendered useless and worthless if the Americans are successful in the attitude that they are adopting?

Mr. Jenkin

I am grateful to the hon. Gentleman for his support from the Opposition Front Bench. I have no doubt that due note will be taken of it.

The hon. Gentleman exaggerated the potential effect. It is impossible to estimate what the impact will be in the longer term, but a 40 per cent. rate is certainly a dismaying rate of countervailing duty. We are determined to try to reach a solution that is fair both to the European industry and to the American industry. Only on that basis can we hope to move forward.