HC Deb 28 January 1987 vol 109 cc324-6
5. Mr. Hickmet

asked the Secretary of State for Trade and Industry if he will make a statement on the prospects for British Steel.

Mr. Channon

The prospects for the United Kingdom steel industry, and for the British Steel Corporation in particular, are more encouraging today than at any time for at least 10 years. BSC is now operating profitably and the Government intend to return the corporation to the private sector during the course of the next Parliament.

Mr. Hickmet

I thank my right hon. Friend for his most encouraging reply. He will be aware that the British Steel Corporation works at Scunthorpe are the jewel in the crown of the BSC. Bearing that in mind, what does my right hon. Friend think about the Labour party policy in relation to imposing a 1 per cent. levy on the total turnover of companies for training purposes? What are his views about Labour party proposals to use the nationalised industries, such as BSC, to recruit persons for social reasons?

Bearing in mind that state aids to the steel industry in Europe were stopped in December 1985, does my right hon. Friend agree that those proposals pose a tremendous threat to the future of BSC? Surely the answer is to give the ownership of the industry to the very people who work in it so that they can have a share in its increasing prosperity and its future running.

Mr. Channon

I agree with my hon. Friend. It is essential that this industry be returned to the private sector at the earliest possible date. My hon. Friend referred to the Labour party's proposals. I am in some difficulty about the 1 per cent. training levy on turnover, because we do not hear about it. I [Interruption.] I notice that Labour Members are sensitive about it. It would cost an additional £30 million to £40 million, which would need to be taken out of the corporation's hard-earned profits. I do not know whether it will be 1, 2 or 3 per cent.

Dr. Bray

Is the Secretary of State aware that, as this is a technologically advanced industry, it will gain. not lose, from a properly organised training scheme? Is he further aware that, under the management of this Government, the British Steel Corporation has reduced expenditure on research and development by 45 per cent. in real terms since 1979 and has failed to take advantage of funds available from the European Community? Can he give an assurance that a privatised steel industry, if the Government are in a position to secure that result, will maintain manufacture at the five integrated sites?

Mr. Channon

I refer the hon. Gentleman to the assurances given on many occasions about the five integrated steel sites. I have to disagree with him about a training levy on turnover. It would cost an additonal £30 million to £40 million, if that is what is proposed. I wish I could get it straight from the Labour party whether it is proposing this. Some days it says yes, some days it says no, and some days it says double. I notice that no one is leaping up to tell us what the truth is. I shall look into the point that the hon. Gentleman makes about research.

Mr. Wrigglesworth

Is not the best thing for the British Steel Corporation, rather than distracting the management with privatisation, to help it to consolidate its recent success and to open up new markets, particularly in Europe, so that it can build and grow in its present form?

Mr. Channon

I agree with what the hon. Gentleman says about consolidation and helping the corporation in its efforts to do that. I was surprised to hear the hon. Gentleman, on behalf of the alliance, speaking against the privatisation of BSC. That is a strange posture for the hon. Gentleman to adopt, but, as he has done so, the electors will have to take note of it.

Mr. Holt

While it would be churlish to disagree with my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet) as to which steelworks are the best, those in my constituency are certainly another jewel in the crown of BSC. None of my constituents will allow the remarks of the hon. Member for Stockton, South (Mr. Wriggleworth) to pass unnoticed. They will realise that the alliance is against the privatisation of British Steel, which must and will come about, to the benefit of my constituents.

Mr. Channon

I am glad to have my hon. Friend's robust support. My hon. Friends the Members for Glanford and Scunthorpe (Mr. Hickmet) and for Langbaurgh (Mr. Holt) will, I am sure, play a major part in the privatisation of British Steel.

Mr. Crowther

When the Council of Ministers considers in a few weeks' time the further massive round of capacity cuts that are being worked out between the Commission and the steel makers through Eurofer, will the right hon. Gentleman bear in mind what the Select Committee on Trade and Industry has said many times, that the British steel industry has taken more than its fair share of cuts and should not have any more imposed on it? In view of what the right hon. Gentleman said about the competitiveness of the British steel industry, is he prepared to stand up and defend it against further reductions?

Mr. Channon

I have always taken a great deal of notice of anything that the Select Committee on Trade and Industry has said, and I shall certainly pay attention to what it says on this topic, as on others. I have made it clear that if Eurofer makes formal proposals to the Council of Ministers, the BSC contribution would have to be consistent with the strategy announced in August 1985, to retain the five integrated works for at least the following three years, and must not prejudice decisions of the strategy for the five integrated works thereafter.

Mr. Williams

Does the Secretary of State realise that that is not enough? Is he aware that if there is the cut envisaged by Brussels of 19 million tonnes, or the smaller, 12 million tonnes cut to which he has already referred, and we took a share in that, eventually that would represent a death threat to one of our major steelworks? Will he give a clear assurance that he is telling Brussels, here, now, and unequivocally, that we will accept no further cuts in our hot rolling capacity?

Mr. Channon

I have already told the House. Indeed, as I understand it, there are no formal proposals before the Council of Ministers and no decisions have been taken. If any proposals were to come forward they would have to be consistent with what I have just told the hon. Member for Rotherham (Mr. Crowther). I repeat the assurances that have been given on many occasions from this Dispatch Box.