HC Deb 25 October 1982 vol 29 cc719-21
5. Mr. Teddy Taylor

asked the Secretary of State for Industry if he will make a further statement on the position of the steel industry.

The Secretary of State for Industry (Mr. Patrick Jenkin)

I refer my hon. Friend to the statement that I made on Friday.

Mr. Taylor

I welcome my right hon. Friend's assurance on Friday that he will use all his powers to ensure that other EEC nations cut their capacity, as we have, and stop cheating on prices, but will he make it absolutely clear that in the absence of progress on both those matters he will not close his mind to the possibility of controls on imports from the Continent, which now amount to more than three-fifths of all our imports?

Mr. Jenkin

I can give my hon. Friend the assurance that I shall indeed press the matters to which he refers with vigour and with the intention that we should produce results. The last part of his question is in a sense hypothetical, but I take careful note of his views.

Several Hon. Members rose

Mr. Speaker

Order. The House may as well know at the beginning that I propose to call three hon. Members from each side on this question, as it is the only question about steel today.

Mr. Barry Jones

Bearing in mind the huge closures and redundancies in past years and the horrible effects on the steel communities, will the Minister pledge that he will implement decisive measures to protect us from cheating imports? Will he also give realistic help on energy costs? Will he make it clear that the sacrifices of the steel communities in Britain, which are now languishing wretchedly with mass unemployment, will not have been in vain, in the light of the emergency now facing the industry?

Mr. Jenkin

I am very conscious of the substantial cutbacks that have been made in both the public and the private sector of the steel industry. I must point out, however, that they were not made in any spirit of sacrifice to the dictates of the Community. They were necessary to restore viability to our own industry. It is also important to recognise that the level of steel imports as a proportion of our market is significantly lower than that in France or Germany. The figure for Britain is 28 per cent., while for France it is 43 per cent. and for Germany 35 per cent. We must also bear that in mind as we consider these issues in the months ahead.

Mr. Michael Brown

Notwithstanding the statistics that my right hon. Friend has given, does he accept that unless we ensure that these imports are stopped, all the sacrifices that have been made in the past two or three years, albeit very necessary ones in certain circumstances, will come to nothing? Does he realise that our steel industry will cease to exist unless, if necessary, we flout the Common Market regulations if the other EEC countries cannot agree to what my right hon. Friend will put to them?

Mr. Jenkin

With the greatest respect, I cannot agree that it would be right for the Government to stop imports into this country. There has been a traditional trade in steel, both imports and exports, over many years. We need to ensure that the stabilisation regime to which we have agreed with the rest of the Community is effective and operates fairly. That was the burden of my conversations in Brussels on Thursday with Vice-President Davignon and Commissioner Andriessen. We are not prepared to stand by and see our efforts to rationalise production frustrated because other countries are not prepared to do the same.

Miss Maynard

Will the Minister guarantee that another rationalisation in the EEC steel industry will not mean that Britain takes a much bigger knock than any other country?

When will the Government subsidise energy for the British steel industry so that it can compete with its competitors, particularly from the EEC? Will the Government not insist on balancing the books until Britain's steel industry is closed down entirely? Will the right hon. Gentleman give an assurance that there will be no further cuts in jobs or capacity?

Mr. Jenkin

I do not intend to preside over the closure of the British steel industry, and I hope that the hon. Lady will take that assurance as well intentioned.

I am aware that some disparities in energy costs still exist, despite the substantial Government help that has been given in two successive Budgets. There are still disparities between the costs met by the British steel industry and those overseas, to which we are giving attention.

Sir Anthony Meyer

Will my right hon. Friend explain to all hon. Members that we cannot have it both ways? It is no good compaining that other EEC countries are cheating if, at the same time, we refuse to accept the rules laid down by the Davignon plan which ensure that there are fair shares. Is it not perfectly plain that whatever the short-term considerations might be—

Mr. Teddy Taylor

Whose side is my hon. Friend on?

Sir Anthony Meyer

—the only long-term hope for preserving jobs in the steel industry is effective European measures to ensure that the European steel industry has the maximum bargaining power in dealing with steel from outside?

Mr. Jenkin

My hon. Friend will agree that the stabilisation measures which have been put into practice are essential for the health of the European steel industry. At the same time, that does not remove from the British steel industry the obligation to be as efficient as possible to compete as effectively as possible within that regime for a share of the market.

Dr. John Cunningham

Is it not clear from the figures given to the Government by the British steel industry's private sector that import levels in special steels are commonly greater than 50 per cent. and in some areas are as high as 80 per cent.? Is it not also clear that those special steel manufacturers cannot survive that level of penetration, and that unless the Government relax their cash limits on the corporation the five remaining major plants will not be able to survive? Do not the workers in those plants deserve a guarantee from the Government now that their jobs will be secure?

Mr. Jenkin

At the June meeting of the Industry Ministers' Council I called for a report from the Commission on the position of special steels. I hope that we shall have that report in time for the meeting next month of the informal Council in Denmark. I assure the hon. Gentleman that I regard that as a matter of great importance.

I cannot, and the hon. Gentleman would not expect me to, stand here and give a categorical, cast-iron assurance that every job in every steelworks will be safe. We must tailor steel capacity to the anticipated demand. I have called for options on that from BSC' s chairman so that the Government can decide how best to approach the matter.