Ravenscraig Steelworks (Hansard, 27 July 1988)

§ 2. Mr. Buchan
To ask the Secretary of State for Scotland what recent discussions have taken place between 387 his Department and the British Steel Corporation concerning the future of the strip mill capacity at Ravenscraig steelworks; and if he will make a statement.

§ The Secretary of State for Scotland (Mr. Malcolm Rifkind)
Following a meeting on 14 July, Sir Robert Scholey wrote to me confirming that, at present, there is no reason for the corporation to make plans to close the Ravenscraig hot strip mill.

§ Mr. Buchan
Has the Secretary of State seen the headline in today's Glasgow Herald, which says MacGregor offers to look at Ravenscraig"? That is the most ominous headline that one has read in the past decade. I hope that, after the discussions, the right hon. and learned Gentleman will make it clear that the Scottish steel industry is not up for trafficking, that the buck stops with him and that he will carry the responsibility. I noticed that he was described as one of the best Secretaries of State for Scotland that we have ever had——

§ Mr. Home Robertson
Who by?

§ Mr. Buchan
By the Prime Minister. That is the kiss of death from the black widow if ever there was one.

§ Mr. Rifkind
I notice that the hon. Gentleman has rejected the view of his hon. Friend the Member for Motherwell, South (Dr. Bray) about the splitting up of the British Steel Corporation. The BSC is performing extremely effectively at present and, to be completely fair, credit must be given to its management, who have found markets that will purchase the product made by the excellent work force at Ravenscraig. Such excellent teamwork offers the best short-term and long-term prospects for Ravenscraig.

§ Sir Hector Monro
Bearing in mind Ravenscraig's success in recent years, does my right hon. and learned Friend agree that any reduction in output in any part of the plant will have a detrimental effect on the Scottish economy? Will he do all that he can to encourage the British Steel Corporation to invest in Ravenscraig, to ensure the plant's long-term future?

§ Mr. Rifkind
I do not know whether a reduction in output would have a significant effect on the Scottish economy, as only 4 per cent. of the British Steel Corporation's products are utilised within Scotland. Ravenscraig's major importance is the employment that it produces for Lanarkshire. Investment has been made in the strip mill in recent years, and I believe that the Arthur Young report, which is often referred to by Opposition Members, said that there was no economic case for new investment in Ravenscraig at the present time.

§ Dr. Bray
Is the Secretary of State aware that the restrictive strategy of the British Steel Corporation is a continuing threat to Ravenscraig? It seeks to restrict capacity and output to force up prices to the limit that European competition will bear. While the immediate threat to the hot mill will depend on when the next dip in demand occurs, the threat to Ravenscraig will remain until the Government take action to impose on Britain's steel industry a genuinely competitive regime to which Ravenscraig can properly contribute.

§ Mr. Rifkind
The actions of British Steel's management have, in part, led to the hot strip mill, which some months 388 ago was operating at reduced capacity, working flat out. Clearly, that steel could not be produced unless there were markets for it. It is to the credit of the management that those markets have been identified. Over the past few years the Government and the British Steel Corporation have insisted on rationalisation and modernisation of the industry, which is why we have a steel industry which, instead of making a loss of over £1 billion a year, as it did in 1979, is making a healthy profit. I am sure the hon. Gentleman will appreciate that a profitable steel corporation is a much better prospect for the long-term future of all its plants, including Ravenscraig, than one that makes a loss of billions of pounds a year.

§ Mr. Salmond
How will Ravenscraig's prospects be affected by the elevation of a sudeten Scot—the hon. Member for Mid-Worcestershire (Mr. Forth), who has joined the Government and therefore left Scottish Question Time, for which we are thankful? Will not the anti-Scottish bias that is so evident among the British Steel Corporation's senior management now be accompanied by anti-Scottish bias in the Department of Trade and Industry?

§ Mr. Rifkind
Only the Scottish National party could interpret the appointment of a Scot to the United Kingdom Government as being to the disadvantage of Scotland. The hon. Gentleman has a lower opinion of his compatriots than have Conservative Members.

§ Mrs. Fyfe
What calculations has the Minister made of the number of non-steel jobs that will be lost if Ravenscraig is closed?

§ Mr. Rifkind
Various calculations have been made, but as there is not the slightest prospect of Ravenscraig closing, certainly in the near future—or, I believe in the longer future—such questions are purely hypothetical. I have emphasised that Ravenscraig is of major importance to the economy of Lancashire. Clearly, there would be grave implications for the economy of the locality if Ravenscraig were to close. The combination of Government policy and the qualities of the industry's work force and management mean that there are no reasons to consider the closure of the strip mill or, in the next few years, Ravenscraig itself.
If the Labour party's policies had been pursued, Ravenscraig could not have hoped to be competitive in world markets, especially as quotas have now disappeared in the European Community.

§ Mr. Gerald Howarth
In the absence of my hon. Friend the Member for Mid-Worcestershire (Mr. Forth), who is deploying his excellent talents for the benefit of the whole of the United Kingdom, will my right hon. and learned Friend confirm that this year alone Ravenscraig has broken 16 production records, and that it has received £12 million of investment over the past three years? If that is kept up, will it not be the best guarantee of the continuation of Ravenscraig?

§ Mr. Rifkind
The Department of Trade and Industry's gain is a loss for Scottish Question Time, I will confirm what my hon. Friend said in the latter part of his question, and repeat the important rider that it would be of little value for Ravenscraig to have this superb maximum output if Sir Robert Scholey and his colleagues in management had not been working to find markets for 389 that output. That combined effort by Sir Robert Scholey, his management team and the work force at Ravenscraig, has substantially increased not only the short-term but the longer-time prospects of Ravenscraig.

§ Mr. Dewar
The Secretary of State might not have been so optimistic about the increased Scottish presence in the Department of Trade and Industry had he had the pleasure of reading the articles about Scotland written by the hon. Member for Mid-Worcestershire (Mr. Forth) for his local press, and the dismissive and wounding comments that he made about expenditure in Scotland. Will the Secretary of State be a little more specific and go a little further than he has so far? As he knows, the guarantee for the hot strip mill at Ravenscraig lasts only until 1989, and in view of his correspondence with Sir Robert Scholey and his suggestion that closure was not a possibility in the near future, will he give the guarantee that he conspicuously refused to give in the recent Scottish Grand Committee debate, and make it clear that there is no possibility of the mill closing in 1989 when the transitional protection ends?

§ Mr. Rifkind
My hon. Friend the Member for Mid-Worcestershire (Mr. Forth) was drawing attention to the level of Government expenditure in the constituency of Glasgow, Garscadden, compared with Government expenditure in Mid-Worcestershire. I can fairly say for my hon. Friend's point of view that there may have been a difference between the two totals to the disadvantage of his constituents.
As to the latter part of the hon. Gentleman's question, I have already said that the view of the British Steel Corporation is that it has no reason to plan for the closure of the hot strip mill. Clearly, it is for BSC and the market that it supplies to determine the prospects for all parts of BSC. I am not in the business of giving guarantees on matters for which I do not have ministerial responsibility. I have not had, I do not have and I will not have ministerial responsibility for this matter. I am sure that the hon. Gentleman will want to join me in expressing delight that, because of the combined efforts of management and work force, there is no economic reason for anyone to wish to consider the closure of the hot strip mill at Ravenscraig.