HC Deb 12 March 1986 vol 93 cc919-20
1. Mr. Strang

asked the Secretary of State for Trade and Industry if he has any plans to meet the chairman of the British Steel Corporation to discuss future investment in the industry; and if he will make a statement.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Paul Channon)

I shall be meeting the chairman designate, Mr. Scholey, on 17 March for a general discussion.

Mr. Strang

Is the Secretary of State aware that the closure of Gartcosh has shaken the confidence of the Scottish people in the commitment of the Government and the Conservative party to the long-term future of the steel industry in Scotland? I welcome last week's announcement of the computerisation of the Dalziel plate mill, but much more investment is required at Dalziel. We are also anxious that an early go-ahead should be given to new coke ovens at Ravenscraig. We also need a new cold-rolling mill facility if Gartcosh is to remain closed. The Secretary of State may be unable to respond positively to all of these points, but will he at least be prepared to meet the Scottish group of Labour Members of Parliament to discuss the issue?

Mr. Channon

I note what the hon. Gentleman says. I do not think that there would be much point in my meeting him and his colleagues about the future of Gartcosh, because that has been settled. It would be raising false hopes to discuss that matter again, because there is no prospect of the decision being changed. However, I am always anxious and willing to see the hon. Gentleman and his hon. Friends about any other matters that they may wish to discuss with me.

Mr. Michael Forsyth

Does my right hon. Friend agree that Opposition Members, who only a matter of weeks ago were telling us that Dalziel would be closed, should recognise that the investment that is being made in the Scottish steel industry is possible only because of the closure of Gartcosh and because the British Steel Corporation is able to target resources where they are most productive? However, when my right hon. Friend meets the chairman designate of the British Steel Corporation, will he ask him to put every effort into creating jobs in small businesses at the Gartcosh site, as the BSC has done so successfully elsewhere in Scotland?

Mr. Channon

I shall certainly raise that matter with the chairman designate of the British Steel Corporation. I am grateful to my hon. Friend for his comments. The House knows that the BSC has recently announced board approval for an investment of £2.5 million at Dalziel. I hope that that news is welcomed by the House.

Mr. James Hamilton

Does the Secretary of State recognise that there is great fear in the Motherwell constituency about the closure of Gartcosh, because of the effect on Ravenscraig? Does he recognise that an investment of £90 million in coke ovens is urgently required and desired? Will he further note that £400 million is being spent on steel plants in England and Wales? That means that the people at Ravenscraig feel that unless something sensational happens the Ravenscraig plant will be the next to close. Will the Secretary of State confirm that that is not the view of the Government? It has always been conceded that Ravenscraig is a matter upon which the Government will have to take a decision.

Mr. Channon

I have nothing to add to what the Government have already said about the future of Ravenscraig. The position remains unchanged. I hope that that is of some comfort to the hon. Gentleman. I hope also that the hon. Gentleman has noted that the BSC plans to spend £15 million on coal injection and other projects at Ravenscraig.

Mr. Crowther

In view of the serious consequences that arose from the undercapitalisation of Sheffield Forgemasters, is the Secretary of State satisfied that the resources being put into Phoenix 2 through the BSC will be adequate to meet all future investment that is needed, including the urgent need for new continuous casting facilities at Rotherham?

Mr. Channon

I hope and think that is so. We shall certainly keep in close touch with the situation.

Mr. Williams

Looking at the investment in the context of the new EEC regime for steel, were not the Government either naive or inept—or perhaps naive and inept—in agreeing to end direct state aid for steel while failing to do anything at all about indirect aid? Does the Secretary of State realise that the result is that the BSC, which receives £1 a tonne of direct assistance, will have to compete directly with Italian producers, who receive £6 a tonne, and with French and German producers, who receive £8 a tonne? Since concurrently the EEC has ended the minimum pricing regime, does that the not mean that the BSC will have to compete at an enormous disadvantage and find that it is incredibly difficult to finance its future investment needs?

Mr. Channon

No. The right hon. Gentleman is probably overstating his case. I do not think that that is the position. The Commission is taking a close interest in these problems, and naturally we will encourage it to continue to do so. It will monitor the position. There is every prospect of the BSC meeting the forecasts. That should be a major cause for congratulating the BSC, considering the difficult position that it has faced over the years.