Steel Industry (Hansard, 18 April 1983)

§ 17. Mr. Hardy
asked the Secretary of State for Industry how many persons are employed in the steel industry (a) at the latest date and (b) four years previously.

§ Mr. Norman Lamont
Numbers employed in the United Kingdom in ECSC activities covered by the treaty of Paris, which exclude a range of downstream activities such as tube production, totalled 165,400 in December 1978 and 74,600 four years later.

§ Mr. Hardy
If we are to see the recovery that Ministers have told us about, is it not clear that other European steel industries will be poised to secure a much greater advantage than our own, since their commitment to contraction was far less than ours? In view of that, will the hon. Gentleman make it clear that there will be no significant contraction in the British steel industry, and will he reconsider the privatisation of steel in south Yorkshire — hinted at by the Secretary of State for Employment last week—in view of the real fears that such privatisation will lead to a greater opportunity and advantage for foreign steel producers?

§ Mr. Lamont
I do not agree with the hon. Gentleman that other countries are better positioned than the United Kingdom. As the hon. Member for Motherwell and Wishaw (Dr. Bray) said, the BSC is extremely well positioned and has become much more competitive. It is true that the British steel industry has shed more jobs than other industries on the Continent, but we had to do that because we were uncompetitive and overmanned. As the hon. Member for Motherwell and Wishaw said, there has been a marked upturn in steel production—33 per cent. from November to February this year. That is a remarkable recovery. The hon. Gentleman knows our policy on privatisation. We believe that as much as possible of the BSC should be returned to the private sector.

§ Mr. Eldon Griffiths
Is my hon. Friend aware that one of the greatest difficulties facing the private steel industry, particularly in tubes, is that the BSC overcharges compared with foreign companies which offer equivalent products? Will he make sure that the BSC does not put our private steel industry at a competitive disadvantage?

§ Mr. Lamont
It is important to ensure that competition between the public and private sectors is fair. We attach great importance to that. We have made that very clear to Mr. MacGregor, and he knows that that is our view. My hon. Friend has provided me with some details and evidence on the particular point that he raised. I have put 15 those to Mr. MacGregor, and I shall come back to my hon. Friend on that matter when I hear from him. It is a serious matter.

§ Mr. Orme
The Minister has referred to Mr. MacGregor, the present chairman of the BSC. When will the Government make an announcement about his replacement? This is essential if we are to remove the uncertainty that exists within the industry. There are problems at Ravenscraig and difficulties at Scunthorpe. We need an early statement from the Government about Mr. MacGregor's replacement.

§ Mr. Lamont
I understand the importance that the right hon. Gentleman attaches to this matter. We hope to make an announcement as soon as possible. We are endeavouring to finalise the matter as quickly as we can.

§ Mr. Greenway
Is it not a fact that during the past four years certain alternatives to steel have been developed? To what extent have they replaced steel?

§ Mr. Lamont
My hon. Friend is right. There is a trend in the motor industry to replace steel with plastics. The aircraft industry is substituting composites for steel, and industries that produce cans for beverages are substituting aluminium. All those things have had a great effect on worldwide steel demand. That is an added reason why we must put all our emphasis on achieving a competitive industry. These changes are taking place everywhere.

§ Mr. Tom Clarke
Is the Minister aware that there is great concern about the decline of the tube division of British Steel, not least in the Imperial and Calder plants in my constituency? He will recall that the Chancellor, in his Budget speech, was optimistic about job prospects as a result of North sea exploration. When will those real jobs emerge?

§ Mr. Lamont
As the hon. Gentleman said, the tube division depends very much on North sea business. He will have seen the speech of my right hon. Friend the Minister of State, Department of Energy, who forecast that within the next couple of years he expects to see a significant upturn in North sea activity. That should be good news for the tube division.