HC Deb 14 December 1983 vol 50 cc990-1
15. Mr. Flannery

asked the Secretary of State for Trade and Industry if the privatisation of the British Steel Corporation under the Phoenix 2 plans is arranged so as to prevent any private monopolies in the British steel industry; and if he will make a statement.

Mr. Butcher

It is for the companies concerned to propose a structure for Phoenix 2. If and when definite plans are drawn up, the competition implications will be considered by the Director General of Fair Trading, who will give advice to my right hon. Friend under the Fair Trading Act. Approval by the European Commission will also be required. The effects of such a merger would need to be considered in relation to the international market, where major competitors are comparable in size to the combined engineering steels operations of BSC and GKN. Subject to these considerations, the Government would welcome a proposal of this type as a means of bringing about rationalisation of capacity and privatising an area of BSC's activity which overlaps with the private sector.

Mr. Flannery

I thank the Minister for that long and confusing answer. Will he undertake to visit what used to be the great industrial area of the east end of Sheffield and see what a desert he and his colleagues have created there, as they are doing throughout the whole of BSC? Will he note that the best parts of those industries—paid for by public money, sometimes known by Conservative Members as taxpayers' money — are being sold off at knock-down prices under Phoenix 2, so creating the ashes from which Phoenix 2 must arise? Will he look, for example, at Guest, Keen and Nettlefold and the plan in which it is engaging to become a major monopoly — [HON. MEMBERS: "Too long."]—by taking over the best parts of our industry?

Mr. Butcher

The Phoenix 2 proposal is not yet with us. We shall examine it to see that it complies with our usual policy requirements for competition within the EC. We are anxious to see the new company, if and when it is proposed to us, attack that part of the market that is at present taken up by imports—about 15 per cent. of the market for engineering steels. We believe that a new company, if formed along the lines proposed, would be in far better shape to meet international competition, particularly that coming from the EC. As for the impact of politics on Sheffield, politicians may propose but the consumer will always dispose.

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