British Steel Corporation (Hansard, 14 June 1982)

§ 6. Mr. Chapman
asked the Secretary of State for Industry what is his latest estimate of the subsidy to be paid out of public funds to the British Steel Corporation in the present financial year.

§ Mr. Norman Lamont
As announced last Friday, the Government have set BSC' s external financing limit for 1982–83 at £365 million.

§ Mr. Chapman
Given that steel imports have substantially increased in recent months and that the United States looks set to institute anti-dumping measures against European steel, is it my hon. Friend's opinion that British Steel's 1982–83 corporate plan still does not need modifying, and that British Steel will break even by the end of this financial, if not calendar, year?

§ Mr. Lamont
We are sticking to the targets in the corporate plan and the targets that have been announced to the House. Provided that there are no serious disruptions to the steel market, we regard these targets as realistic. Obviously, as my hon. Friend said, the actions taken in the courts in the United States are serious for British Steel's exports. We shall have to wait for developments to see how they work out. With regard to imports more generally, voluntary restraint agreements have now been negotiated between the EEC and the third countries.

§ Mr. Campbell-Savours
Would not the subsidy be reduced if British Shipbuilders were in a position to increase its orders of steel from the British Steel Corporation? Has the Minister seen the reports in the media over the weekend that Cunard is about to buy a replacement for the "Atlantic Conveyor" from Japan, thus ensuring that jobs will not exist in British Shipbuilders that should exist in the future? Will the Minister intervene to prevent that contract from being made?

§ Mr. Lamont
No, Sir, I shall not. Cunard's orders are a matter for the company. With regard to steel orders placed by British Shipbuilders, I agree with the hon. Gentleman. If British Shipbuilders could get more orders, it would be able to place more orders for steel. However, that depends on British Shipbuilders reaching a higher standard of competitiveness.

§ Mr. Wrigglesworth
What contingency margin have the Government allowed in the external financing limit of the steel corporation, and on what basis has it been fixed? For instance, have the Government taken into account the difficulties that BSC faced during the winter? Have they taken into account, or will they take into account, the effect of the American decision?

§ Mr. Lamont
A £79 million contingency is built into the EFL of £365 million. That is considerably less than the corporation asked of us.

§ Sir Anthony Meyer
As it is clear that even the existing level of employment in the steel industry can now be maintained only by imposing heavy burdens on the rest of industry, is it not also clear that the time has come to switch the emphasis into providing new jobs in steel areas, rather than trying to maintain previous levels?

§ Mr. Lamont
We must try to do both. It is important to replace jobs that are lost in the steel closure areas. My hon. Friend knows that that is what we are trying to do through the EEC measures for steel closure areas. At the same time, there is a future for bulk steel making in this country. The corporation has made great progress, thanks both to the work force and to Mr. MacGregor, in becoming much more competitive and reducing losses. In the past year, losses were £252 million before interest, compared with £479 million in the year before. That is a considerable achievement.

§ Mr. Orme
Faced with the position in the United States and the failure of the EEC to do something about imports, is it not a fact that Mr. MacGregor will need more money, and has he not been saying so, because of the lack of demand? Will that money be forthcoming?

§ Mr. Lamont
Imports in 1981 were less than in 1980 both in volume and percentage terms. Because of our anxiety about the possibility of increased imports from third countries, my right hon. Friend is writing to the Commission to emphasise that the mandatory quota regime should not be undermined by imports.
I do not accept that the EEC has been ineffective in the controversy between ourselves and the United States. The Commission has taken a strong line. Of course the determination is disappointing, but we and the Commission are currently discussing the matter.