HC Deb 27 February 1985 vol 74 cc325-6
10. Mr. Ewing

asked the Secretary of State for Trade and Industry if he will use his powers to impose quotas on the export of scrap iron and steel.

Mr. Butcher

National controls could be imposed only on exports to third countries, not to the European Community. In the absence of an EC export control regime, exports would simply be diverted via another member state, and the controls would be ineffective.

Mr. Ewing

Is the Minister aware that it is very worrying that he does not seem to appreciate the problems of British iron and steel foundries, which have been seriously affected because the price of scrap iron and steel has increased threefold in the past 18 months? Companies such as the Grahamston Iron Company in my constituency have worked hard, on the advice of the Government, to get themselves into a profitable situation, only to have their feet cut from under them by the Government's failure to take action on this very serious problem.

Mr. Butcher

I am very much aware of the current concerns of the foundrymen. I met a large number of them last Friday, representing several branches of their institute. They told me of their concern about scrap prices. We have to decide to what extent it is a temporary phenomenon—there is usually a peak in January and February—and the extent to which co-ordinated European Community action can be brought to bear on the problem. I am also aware of the problem regarding Spain. I believe that the question of the Italian subsidy has been satisfactorily resolved through the European Commission.

Mr. Beaumont-Dark

Will my hon. Friend accept that, obliged as we are to him for being much aware of the problem, that is no substitute for action in the matter? Is he aware that the reason for scrap metal prices rising threefold, damaging an already bereft industry, is Spain's protection of its steel industry, which enables it to pay more and more for scrap metal? Will the Minister be less aware and more active on our behalf?

Mr. Butcher

The question of Spanish practice in this connection will be resolved entirely when Spain comes into the European Community. [Interruption.] My hon. Friend says that he requires more action. That action must come within Europe. My hon. Friend the Minister of State will, if appropriate, make representations to the Steel Council if the current phenomenon looks like being permanently damaging.

Mr. Williams

Does the Minister realise that for him to suggest that we have to wait for the problem to be dealt with until Spain's accession to the Common Market is unforgivable indolence on the part of the Government?

Mr. Butcher

The right hon. Gentleman obviously does not understand two things. The first is that we have a surplus of scrap output of 4 million tonnes per annum. Therefore, within the European Community it is virtually impossible for us to take the measures that he requires.

Secondly, the right hon. Gentleman fails to understand that the scrap industry, which employs 100,000 people, is in itself a very significant employer. The industry must make its decisions on its marketing plans. We are concerned, and we shall take action if the particular phenomenon looks like doing the sort of damage that my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) suspects that it may do.

Mr. Ewing

In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.