HC Deb 22 March 1982 vol 20 cc675-6
10. Mr. David Watkins

asked the Secretary of State for Industry if he will make a statement about the financial prospects of the British Steel Corporation.

Mr. Norman Lamont

The BSC has recently completed its reassessment of the corporate plan for 1982–85. That plan shows that, following the great progress made in the past year, there is a good prospect that BSC will achieve break-even in 1982–83. A full statement will be made when the Government have completed their consideration of the BSC plan.

Mr. Watkins

Will the future financing of the industry, including Mr. Ian MacGregor's transfer fee—the size of which is not yet settled—be linked to the continuing contraction and dismemberment of the BSC?

Mr. Lamont

The corporate plan put to the Government was prepared on the basis that the existing configuration of basic steel production within the BSC will remain unchanged, but there will be a need all the time for further slimming down of manpower in order to continue the improvement in productivity. As the hon. Gentleman knows, the chairman's remuneration is tied to the performance of the BSC over a period. It will not be determined until after he has left.

Mr. Chapman

Bearing in mind that about £6,000 million of public money has been poured into the BSC over the past 10 years, will my hon. Friend assure the House that, however painful the shedding of substantial proportions of labour in the BSC has been over the past two years, it is the main reason why there is a better prospect that the corporation will break even in 1982–83?

Mr. Lamont

My hon. Friend is right to suggest that there was a great need for BSC to achieve internationally competitive manning levels. The stance taken by the Labour Administration in keeping open the Beswick plants, far from saving jobs, meant that in the long run many more jobs had to go. If only the nettle had been grasped earlier, we would have had a more competitive industry, probably a bigger one and there would be improved security for employees.

Mr. Hooley

How can the hon. Gentleman justify the massive cut in capacity in our steel industry when in Germany the cut has been only about 5 per cent. and Italy and Spain have had substantial increases in capacity?

Mr. Lamont

I refer the hon. Gentleman to my reply to my hon. Friend the Member for Chipping Barnet (Mr. Chapman). The cuts have had to be bigger in this country because the steel industry was not so competitive. If it had been competitive earlier, the need for cutbacks would have been less. From now on, having made great adjustments in capacity, we are looking to other countries, under the arrangements in Europe, to make reductions in capacity.