Steel Industry (Hansard, 29 November 1982)

§ 1. Mr. Hal Miller
asked the Secretary of State for Industry whether he has received the corporate plan for 1983 of the British Steel Corporation.

§ 3. Mr. Canavan
asked the Secretary of State for Industry whether he will make a statement about the future of the steel industry.

§ 4. Mr. Eggar
asked the Secretary of State for Industry if he will make a statement on the future of the British Steel Corporation.

§ 7. Mr. Hooley
asked the Secretary of State for Industry when he expects to receive a revised corporate plan from the chairman of the British Steel Corporation.

§ 17. Mr. Teddy Taylor
asked the Secretary of State for Industry when he next plans to meet the chairman of British Steel to discuss the future of the steel industry.

§ The Secretary of State for Industry (Mr. Patrick Jenkin)
I am currently discussing with BSC the basis on which its corporate plan for 1983 to 1986 should be drawn up. I hope to make a statement before the Christmas Recess.

Several Hon. Members
rose——

§ Mr. Speaker
Order. I propose to call first the five hon. Members whose questions are being answered.

§ Mr. Miller
Will my right hon. Friend give an assurance that the discussions relate to the steel industry as a whole, not just to the BSC? Will he ensure that the interests of the private steel industry, in particular, are considered and that a basis of competition is established which means that those interests will not be put out of business by subsidies from the taxpayer to the BSC?

§ Mr. Jenkin
I have absolute sympathy with what my hon. Friend says. The immediate purpose of our discussions is to agree the assumptions on which the British Steel Corporation's plans should be based. In looking at the market and the future disposition of Government funding, we are paying the closest possible attention to the needs of the private sector.

§ Mr. Canavan
Is the Secretary of State aware of the total opposition in Scotland to the closure of Ravenscraig, which would destroy at least 13,500 jobs and devastate the whole Scottish economy? Is the right hon. Gentleman further aware that any shabby compromise involving partial closure is also not acceptable?
As the Secretary of State for Scotland put his job on the line over the future of Ravenscraig and as the chairman of the Scottish Tory Party can stand up in public and say that closure is not acceptable to his party, will the Secretary of State now make a similar statement that he, too, would resign rather than see the closure of Ravenscraig?

§ Mr. Jenkin
I assure the hon. Gentleman that no decisions have been taken about the future of Ravenscraig or any other of the four major integrated plants, despite some press speculation to the contrary. Of course, we are having to look in the medium term at the appropriate 3 configuration of the British Steel Corporation's steelmaking capacity. I do not think that the hon. Gentleman would expect any less. I assure him that we are taking full account of all the factors that bear upon what, by any standards, is an important complex of decisions that need to be taken.

§ Mr. Eggar
Was not the contraction that has taken place in the British steel industry inevitable given the complete lack of competitiveness of the British Steel Corporation from the start?

§ Mr. Jenkin
Part of the difficulty over the past two or three years within the British Steel Corporation arose from the long delay that occurred under the Labour Government when contraction plans, which should have been put forward in the mid-1970s, were repeatedly delayed. When the Conservative Government took over, they faced a corporation that had substantial overcapacity. It was substantially overmanned, totally bankrupt and in need of huge sums of public money to save it. It is great credit to the management of the British Steel Corporation that so much progress has been made.

§ Mr. Teddy Taylor
Does my right hon. Friend not feel entitled to resist further steel closures in Britain until other EEC countries show some sign of matching these with cuts of their own? Is it not outrageous that since 1979 more steel jobs have been lost in Britain than in the rest of the Common Market put together?

§ Mr. Jenkin
My hon. Friend is right. I have made this point not only to the Commission but to my colleagues on the Industry Council. There is no question but that there has been a very uneven response to the Commission's plans for linking State aids with the reduction of capacity. We have done a great deal. We now look to our partners to play their part.

§ Dr. Bray
Will the Secretary of State confirm that the assumptions that he is discussing with the British Steel Corporation include its competitiveness, output and productivity and the output of steel-consuming industries for the next 10 or 20 years? If not, how can the right hon. Gentleman reach a decision on the major capacity that exists?

§ Mr. Jenkin
The talks cover all the items to which the hon. Gentleman has referred. It would be beyond the wit of mankind to look 20 years ahead. It is as much as one can do to look five or six years ahead to see what the market will be like in the light of productivity trends, the trends of user industries and the world-wide trend of simply using less steel as other materials supplant steel in the manufacture of a wide range of artefacts. We are struggling to do our best. There has been delay because we want to ensure that we get the assumptions right.

§ Mr. Michael Brown
After all the sacrifices and courage shown by the Government over the past two or three years in trying to make the British Steel Corporation efficient, would it not be a travesty if all that were to come to nothing because the British Steel Corporation was not given a chance to implement the full corporate plan involving the 14.4 million tonnes that was envisaged two and a half years ago by the chairman?

§ Mr. Jenkin
The market prospects for steel have changed markedly in the past two and a half years, and even more recently than that. In 1981 the British Steel 4 Corporation produced 13.6 million tonnes of liquid steel with a plant capacity of 21.3 million tonnes a year. Recently, output has fallen to 10 million tonnes a year. There are comparable figures for the private sector. There is a wide margin for flexibility. We have to consider what the market for steel is likely to be three, four or five years ahead. It is sensible to plan upon that basis.

§ Mr. Roy Hughes
Is it not wrong to keep our vital steel industry perpetually on tenterhooks? Does that not have a grave effect on morale in the industry? The industry now deserves a substantial vote of confidence. Could not the Secretary of State best do that by restricting imports? I should like him to look at the 67 per cent. of imports coming in from the Common Market. The Government could do a great deal to stimulate growth in the economy.

§ Mr. Jenkin
I understand the problem for those who work in the steel industry. We are trying to reach decisions as soon as possible. I need no lectures about imports from the hon. Gentleman. We have imposed anti-dumping duties on imports from Spain and Brazil. We have imposed quotas on imports from Czechoslovakia and Bulgaria.

§ Mr. Hughes
What about the EC?

§ Mr. Jenkin
Anti-dumping investigations have been started recently against Canada, Argentina, Venezuela and Brazil. That is why I have been pressing the Commission, with some success, to take a much tougher line in enforcing article 58 quotas and adhering to the Community's steel price regime. That is the way to prevent the disruption of the steel market in this country.

§ Mr. Maclennan
What steps is the Secretary of State taking to stimulate demand for steel? How has he responded to Ian MacGregor's proposals for the Channel bridge and tunnel project?

§ Mr. Jenkin
The amount of steel that would be involved in the Euro-route project that Mr. MacGregor is championing would make only a small dent in the problem that we face. It may have merits in its own right, but that is not for discussion today.
With regard to demand for steel generally, I hope that the hon. Gentleman will applaud, as I do, the 26 per cent. increase this year in capital investment in nationalised industries.

§ Mr. Ward
When my right hon. Friend listens to special pleading for various parts of the steel industry, will he bear in mind that any money made available can come only from profitable industries? If he takes more money from those industries, it will not be available for investment in the real world.

§ Mr. Jenkin
That is a factor about which my Treasury colleagues remind me regularly.

§ Dr. John Cunningham
Is the Secretary of State aware that although the Labour Administration were reluctant to have massive unemployment from steel closures—we make no apology for that—other European Governments have shown even more reluctance to go along the path that he recommends? As the Secretary of State has said that there is to be a review of both the public and private steel industries, will he reiterate his commitment not to take decisions on any short-term considerations about the steel market? Will the right hon. Gentleman assure us that there will be no further closures while that review is going on, such as those at Roundoake and Craigneuk? Will he also 5 ensure that the evidence being collected by the Iron and Steel Trades Confederation about cheating on quotas and prices will be fully examined?

§ Mr. Jenkin
Of course we are not taking decisions on purely short-term considerations. I have made that point many times.
With regard to individual plant closures, I made it clear to the House when I made my statement on 9 November that the current review of the British Steel Corporation's strategy cannot be allowed to hold up necessary cost-saving measures that do not involve the closure of any of the five integrated steelworks. The corporation needs to take urgent action to restore its commercial and financial position. Those are matters for the corporation's judgment and do not require authorisation by Ministers.
Cheating was in the forefront of our discussions at Elsinore. I received a ready response from the Commission when I demanded more effective measures to police the regime to prevent what the hon. Gentleman described as "cheating".