Financial Assistance (Hansard, 14 March 1983)

§ 1. Mr. Chapman
asked the Secretary of State for Industry what was the total subsidy paid to British Leyland, British Shipbuilders and the British Steel Corporation in the last year for which figures are available; and what were the comparable figures for one and two years before.

§ The Secretary of State for Industry (Mr. Patrick Jenkin)
Assistance to BL, British Shipbuilders and the British Steel Corporation was nearly £1.75 billion in 1980–81, £1.5 billion in 1981–82 and is forecast to have been about £1–25 billion in 1982–83. My forecast for 1983–84 is a further reduction to under £0.75 billion.

§ Mr. Chapman
I am grateful to my right hon. Friend for that information and I welcome the trend. Will he confirm that there has been a dramatic improvement in efficiency, especially in output per man, in those three industries? Will he further confirm that assistance to those industries represents a smaller proportion than hitherto of total Government funds available to industry?

§ Mr. Jenkin
The answer to the second part of my hon. Friend's question is yes. Support for those casualties of the 2 past will be less than 40 per cent. of my total budget for 1983–84 for the first time in several years. There have been notable improvements in efficiency. However, those industries must become fully competitive if they are to survive in today's world.

§ Dr. Bray
What is the Secretary of State's view of the proposal of BSC' s chairman to spend £100 million on buying an American steelworks and closing the strip mills at Ravenscraig? Is he aware that Ravenscraig is producing more than 35,000 tonnes of steel a week, that it is achieving a level of productivity that is better than 4.1 man hours per tonne and that it is expected to break even this month, contrary to the views of the chairman of BSC and of the Industry and Trade Committee?

§ Mr. Jenkin
The Government have received no formal proposal from the BSC about a deal with an American steel company. Negotiations of that type would initially be a matter for the corporation. The Government would expect the BSC to consult them about such an arrangement before any final decisions were taken.

§ Mr. John Grant
Did not the Minister of State show extraordinary ideological fanaticism last week when, in a speech about the steel industry, he suggested that its trials and tribulations were paving the way for privatisation? Will that not undermine further the moral of the industry and create additional uncertainty?

§ Mr. Jenkin
My hon. Friend made an excellent speech, which was well reported. The Social Democratic party believes that ownership, finance, the appointment of managers and accountability to the public are irrelevant to the problems of these industries. I profoundly disagree. The decisions that I and my colleagues have taken in recent years about those industries have convinced me that they ought to be in the private sector.

§ Sir Anthony Meyer
Could not those gigantic sums have been used to provide more jobs, possibly in the tourist industry? Failing that, would not those sums have been better employed in providing the country with decent social services?

§ Mr. Jenkin
I gave a full explanation of that decision in the House on 20 December 1982. Certain comments have been made by the Select Committee, to which the Government will be replying in due course. The Government took the right decision to maintain steel making at Ravenscraig.

§ Mr. Orme
Will the Secretary of State confirm that if the proposed agreement goes ahead, it could lead to the loss of 2,000 jobs at Ravenscraig, the closing of a strip mill and the investment of £100 million outside the United Kingdom? Does that not contravene what the Government agreed in December, which was to keep the five major plants open and fully employed?

§ Mr. Jenkin
As I understand the proposal that Mr. MacGregor has been discussing with the trade unions in Scotland, it would involve—as I think he put to them—a five-year guarantee for the off-take of steel made at the heavy end at Ravenscraig. As I said to the hon. Member for Motherwell and Wishaw (Dr. Bray), if the proposals involved the closure of the hot strip mill, the Government would need to be consulted.