§ '(1) The successor company shall inform the Secretary of State of any proposed capital expenditure projects the cost of which exceeds £1 million, and in connection therewith shall make an annual forecast of the domestic prospects for steel demand in the five years from the end of the most recent financial year.
§ (2) The forecast specified in subsection (1) above shall be laid before Parliament by the Secretary of State as soon as is reasonably practicable.
§ (3) This section shall no longer apply when the successor company has ceased to be wholly owned by the Crown.'.—[Mr. Austin Mitchell.]
§ Brought up, and read the First time.
§ Mr. Austin Mitchell (Great Grimsby)I beg to move, That the clause be read a Second time.
It is clear from the previous debate that Ministers desire only to sell the British steel industry in one lump—to get rid of it and to run. Their only real desire to offer any help, encouragement, support or intervention in the industry—their only real aim—is to put up posters of Sir John Harvey-Jones looking as if he is about to burp and saying, "History is in the making." That is the Government's only preoccupation with the indu3try. They do not have arty concern about competition. They have not learnt the lessons of privatising monopolies such as British Telecorn. They have not thought of the consumer, or of whether they are privatising or just creating private sector monopolies, which seems the essence of the process.
New clause 1 asked the Government to give the reasons for and an explanation of what they are doing and why they are doing it. New clause 5 puts that more positively. We want to reinforce our concern about investment because that is crucial to the British steel industry. The new clause is limited by section 3 and ceases to apply when a successor company has ceased to be wholly owned by the Crown. So far as one can gather from the rumours and the 855 gossip, the Government's aim is to get rid of the corporation as quickly as possible. In my view, that would be a mistake and a national tragedy.
We had to put the new clause in that form because of the nature of the Bill. It is essentially a shabby little Bill. It transforms the great British Steel Corporation into a company of a kind that might have fallen off the back of the register of companies, and allows the Government to flog it off. It is difficult for us to intervene in a Bill that is shaped like that.
However, our intervention is an attempt to impose concern about investment and a requirement on the company to report to the Secretary of State and to Parliament on the need for, the prospects of and the commitment to investment, and to set a precedent which we hope will be sustained after the Government have finally got rid of it and it has ceased to be wholly owned by the Crown. We are primarily concerned about investment in the industry.
Investment will not be the central preoccupation of private investors, who will want the maximum rate of return from the British steel industry, the highest level of dividends, and to be able to write off the investment over a period. They will not be concerned, in the way in which a public sector company or a nationalised industry is, with the long-term health and viability of the steel industry. They will not have the same concern as a nationalised industry about wider social and national interests or about the need to provide a cheap basic feedstock for manufacturing industry.
The key to the Japanese manufacturing success has been the provision of low-priced, high-quality steel to manufacturing as a basic raw material. We are anxious that such steel should be provided as cheaply as possible to our manufacturers as the base for manufacturing's healthy activity. We think that a nationalised framework is best for that. If the corporation is now to be passed to the investors, who will be concerned about getting a return and not about building up the industry, we believe that we can only sustain investment by requirements such as those set out in new clause 5.
However, Ministers do not seem to be interested in investment, although it is crucial if the industry is to remain viable, effective and competitive. We must have more investment in continuous casting. The proportion of our output derived from continuous casting is lower than that of most of our competitors. We have been slow to move into continuous casting. Japanese industry will be almost totally continuous casting within a short period. If we are to stay competitive, there must be heavy investment in that area. We also need investment in continuous annealing, which is further downstream. We need investment in plate and mini-mills.
We need considerable investment. The chairman of British Steel has estimated such investment at £300 million per year. However, he has not said for how long he intends to sustain that level of investment, or whether it will be a long-term commitment, which is what we should like. However, we are talking about a heavy level of investment to bring British Steel up to the level of our competitors and to allow for the new technology and new processes that are necessary in a rapidly evolving industry.
856 Without sustained concern for investment and a sustained process of investment, British Steel will lag behind, and be concerned only to exploit the market and pay out dividends, which is what happened when the steel industry was in private ownership. It had an appalling record of paying dividends—often out of capital—failing to invest and failing to keep up with processes. Investment can be sustained adequately only by nationalisation. Nationalisation has transformed the industry. The under-invested wreckage that was taken over by the Labour Government in the 1960s was transformed into an industry which has been developed on five integrated coastal sites, which is highly invested and which needs to keep up if it is to remain at the forefront.
All we ask, therefore, is that there be a continuing requirement on the company to report on its investment proposals, the role of that investment as a drive motor of the economy and the role of steel as an index of economic performance in this country, and to report also to Parliament. Although the Secretary of State's views may be prejudiced and, under this Government, ill informed, Parliament will then at least have the basis for forming its own judgments and testing and measuring the assumptions built into these investment projections by British Steel. This is therefore an attempt to maintain a continuing interest by Parliament and Government in the responsibilities that both have for the British steel industry.
§ The Parliamentary Under-Secretary of State for Industry (Mr. Robert Atkins)We had a long debate earlier without a vote and now perhaps we can have a short debate with a vote. I do not want to delay the House for long.
At present, under section 4(3) of the Iron and Steel Act 1982, the corporation is obliged to act in accordance with a general programme settled from time to time with the Secretary of State when carrying out any work which involves a substantial outlay on capital account. During the period between vesting and privatisation, the question of investment by the successor campany will be covered by provisions in the company's articles of association and a memorandum of understanding with the Secretary of State. These will broadly preserve the present arrangements for monitoring the company's investment programme at a strategic level. The Secretary of State will not intervene in the day-to-day management of the company. All such arrangements will cease once the successor company ceases to be wholly owned by the Crown. While the company is wholly owned by the Crown, the Secretary of State will be accountable to Parliament as the company's sole owner. As such, he will have ultimate control of the company and its strategic operations.
During the interim period before privatisation, therefore, the successor company will have to inform the Secretary of State of major capital projects. There is no need to incorporate the arrangements in the Bill. Such arrangements in previous privatisations have been handled perfectly satisfactorily in the same way.
We see no reason to provide in the Bill that the successor company shall submit a forecast of steel demand in the United Kingdom for the five years following the last financial year. If the successor company submits an investment proposal to the Secretary of State for approval, it will be required, under the memorandum of understanding, to submit a detailed investment appraisal. 857 Clearly, that appraisal would be subject to commercial confidentiality and would not be proper material for debate in Parliament. If hon. Members wish to obtain forecasts of future steel demand, there are sources other than British Steel which could provide those figures.
We do not therefore accept that there is a need to incorporate the provisions of the new clause in the Bill, and I ask the House to reject it.
§ Mr. Michael Foot (Blaenau Gwent)I find the Minister's answer totally unsatisfactory. I am very glad that my hon. Friend the Member for Great Grimsby (Mr. Mitchell) moved the new clause in the form that he did because he called attention to one of the essential weaknesses in the Bill which the Government are trying to push through and one of the most important features of the steel industry. I hope that this new clause will be passed and that the Government and the BSC will be forced to take it into account.
I believe that the evidence from all that has happened in past years underlines the need for that kind of action. I cite the steel works in my own constituency, which in the past two or three years has been fairly successful. The tinplate finishing plant in Ebbw Vale has been producing tinplate as successfully as any firm on the face of the planet, but all that was planned and was dependent upon investment that took place 10, 11 or 12 years ago. When we had the big rundown in general steel making, we carried through a big expansion of investment in the finishing plant, and that is why we have been able to carry through the advances there. We had an investment of £70 or £80 million in 1977 and 1978, and that is the reason for the proper conduct of the industry in Ebbw Vale at the present time.
We want the same sort of guarantees for the future, but the BSC, for its own reasons—I am not blaming it for this—has been carrying through fresh investments in Trostre and Velindre, not quite on the scale that it did with us 10 years ago, but looking to the future there. Naturally, when that tinplate investment took place elsewhere, we asked the BSC to give us guarantees that we should have fresh investment to sustain our tinplate production on a proper basis over the years ahead.
The people in the BSC are eager that that should happen. They told us that they planned a major expansion of the operation in Ebbw Vale in two or three years' time and that there would be other capital advances in the meantime. The tinplate operation in Ebbw Vale would be serving the nation for the next 10 or 20 years, and would at any rate have the basis of proper investment for the future.
Of course, if the industry had been left in public ownership, that is exactly what could have been done. The Steel Corporation could have given a valid, continuing pledge to the people in Ebbw Vale, who have managed a very difficult changeover with great skill and success. But, owing to the miserable, squalid measure that the Government have brought forward, and their allegiance to the ridiculous dogma of handing the industry over to somebody else, the corporation is not able to give that guarantee.
So, even at this late hour, I urge the Government to accept the new clause and the arguments put forward by my hon. Friend the Member for Great Grimsby so that at least some safeguards may be incorporated in this measure. It is quite absurd that that kind of guarantee 858 should have been removed by the change in ownership. We are trying to rescue something so that the workers in the industry may have some proper guarantees for the future.
§ Mr. Austin MitchellMy right hon. Friend the Member for Blaenau Gwent (Mr. Foot) has put the case so powerfully that there is no need to repeat it. The Minister's reply was very unsatisfactory. It indicated that in all those hours in Committee he learned nothing, and that he d id not know much in the first place. His reply was totally dismissive. Under private ownership, this industry had an appalling record of bad investment and disorganisation. It has now been passed back in to the private sector, with no guarantees concerning the maintenance of investment, by a Government who tell us that they have no major proposals for investment in the steel industry at the present moment. It is no answer to our argument to hide behind the skirts of business confidentiality. We need to know that British Steel has plans for investment in continuous casting and all the other processes to keep up with the technology.
We need to be satisfied that this will be a healthy industry that will take Britain into the next century and provide a firm, strong base for the manufacturing sector—a manufacturing sector that it will be the responsibility of the next Labour Government to rebuild and that will be rebuilt on the basis of a powerful, competitive steel industry. That is our concern, and it can be met only by investment and continuous provision for investment through this new clause.
I ask my hon. Friends to support the new clause in the Lobby.
§ Question put, That the clause be read a Second time:—
§ The House divided: Ayes 202, Noes 235.
861| Division No. 307] | [7.20 pm |
| AYES | |
| Abbott, Ms Diane | Clarke, Tom (Monklands W) |
| Adams, Allen (Paisley N) | Clay, Bob |
| Allen, Graham | Clelland, David |
| Alton, David | Clwyd, Mrs Ann |
| Anderson, Donald | Cohen, Harry |
| Archer, Rt Hon Peter | Cook, Frank (Stockton N) |
| Armstrong, Hilary | Corbett, Robin |
| Ashley, Rt Hon Jack | Corbyn, Jeremy |
| Ashton, Joe | Cousins, Jim |
| Banks, Tony (Newham NW) | Cox, Tom |
| Barnes, Harry (Derbyshire NE) | Crowther, Stan |
| Barron, Kevin | Cummings, John |
| Beckett, Margaret | Cunliffe, Lawrence |
| Beith, A. J. | Dalyell, Tam |
| Bell, Stuart | Darling, Alistair |
| Bennett, A. F. (D'nt'n & R'dish) | Davies, Ron (Caerphilly) |
| Bermingham, Gerald | Davis, Terry (B'ham Hodge H'l) |
| Bidwell, Sydney | Dewar, Donald |
| Blair, Tony | Dixon, Don |
| Boateng, Paul | Dobson, Frank |
| Boyes, Roland | Doran, Frank |
| Bradley, Keith | Douglas, Dick |
| Bray, Dr Jeremy | Dunnachie, Jimmy |
| Brown, Gordon (D'mline E) | Dunwoody, Hon Mrs Gwyneth |
| Brown, Nicholas (Newcastle E) | Eadie, Alexander |
| Bruce, Malcolm (Gordon) | Eastham, Ken |
| Buchan, Norman | Ewing, Harry (Falkirk E) |
| Buckley, George J. | Fatchett, Derek |
| Caborn, Richard | Faulds, Andrew |
| Callaghan, Jim | Fearn, Ronald |
| Campbell, Ron (Blyth Valley) | Field, Frank (Birkenhead) |
| Campbell-Savours, D. N. | Fields, Terry (L'pool B G'n) |
| Canavan, Dennis | Flannery, Martin |
| Carlile, Alex (Mont'g) | Flynn, Paul |
| Clark, Dr David (S Shields) | Foot, Rt Hon Michael |
| Foster, Derek | Morgan, Rhodri |
| Foulkes, George | Morley, Elliott |
| Fraser, John | Morris, Rt Hon A. (W'shawe) |
| Fyfe, Maria | Morris, Rt Hon J. (Aberavon) |
| Galbraith, Sam | Mowlam, Marjorie |
| Garrett, John (Norwich South) | Mullin, Chris |
| Garrett, Ted (Wallsend) | Murphy, Paul |
| Gilbert, Rt Hon Dr John | Nellist, Dave |
| Godman, Dr Norman A. | O'Brien, William |
| Gordon, Mildred | O'Neill, Martin |
| Graham, Thomas | Orme, Rt Hon Stanley |
| Grant, Bernie (Tottenham) | Parry, Robert |
| Griffiths, Nigel (Edinburgh S) | Patchett, Terry |
| Grocott, Bruce | Pendry, Tom |
| Hardy, Peter | Pike, Peter L. |
| Hattersley, Rt Hon Roy | Powell, Ray (Ogmore) |
| Healey, Rt Hon Denis | Prescott, John |
| Heffer, Eric S. | Primarolo, Dawn |
| Henderson, Doug | Radice, Giles |
| Hogg, N. (C'nauld & Kilsyth) | Randall, Stuart |
| Holland, Stuart | Redmond, Martin |
| Home Robertson, John | Rees, Rt Hon Merlyn |
| Hood, Jimmy | Richardson, Jo |
| Howarth, George (Knowsley N) | Roberts, Allan (Bootle) |
| Hoyle, Doug | Robertson, George |
| Hughes, John (Coventry NE) | Robinson, Geoffrey |
| Hughes, Robert (Aberdeen N) | Rooker, Jeff |
| Hughes, Roy (Newport E) | Ruddock, Joan |
| Illsley, Eric | Salmond, Alex |
| Ingram, Adam | Sedgemore, Brian |
| Janner, Greville | Sheerman, Barry |
| John, Brynmor | Sheldon, Rt Hon Robert |
| Jones, Barry (Alyn & Deeside) | Short, Clare |
| Jones, Ieuan (Ynys Môn) | Skinner, Dennis |
| Jones, Martyn (Clwyd S W) | Smith, Andrew (Oxford E) |
| Kaufman, Rt Hon Gerald | Smith, C. (Isl'ton & F'bury) |
| Kennedy, Charles | Soley, Clive |
| Lambie, David | Spearing, Nigel |
| Lamond, James | Steel, Rt Hon David |
| Leadbitter, Ted | Steinberg, Gerry |
| Leighton, Ron | Stott, Roger |
| Lestor, Joan (Eccles) | Strang, Gavin |
| Lewis, Terry | Straw, Jack |
| Litherland, Robert | Taylor, Mrs Ann (Dewsbury) |
| Lloyd, Tony (Stretford) | Thomas, Dr Dafydd Elis |
| Loyden, Eddie | Thompson, Jack (Wansbeck) |
| McAllion, John | Turner, Dennis |
| McAvoy, Thomas | Vaz, Keith |
| McCartney, Ian | Wall, Pat |
| McFall, John | Wallace, James |
| McKay, Allen (Barnsley West) | Walley, Joan |
| McKelvey, William | Wardell, Gareth (Gower) |
| McLeish, Henry | Wareing, Robert N. |
| McNamara, Kevin | Welsh, Andrew (Angus E) |
| McTaggart, Bob | Welsh, Michael (Doncaster N) |
| Mahon, Mrs Alice | Wigley, Dafydd |
| Marek, Dr John | Williams, Rt Hon Alan |
| Marshall, David (Shettleston) | Williams, Alan W. (Carm'then) |
| Marshall, Jim (Leicester S) | Wilson, Brian |
| Martin, Michael J. (Springburn) | Winnick, David |
| Martlew, Eric | Wise, Mrs Audrey |
| Maxton, John | Worthington, Tony |
| Meale, Alan | Wray, Jimmy |
| Michael, Alun | Young, David (Bolton SE) |
| Michie, Bill (Sheffield Heeley) | |
| Michie, Mrs Ray (Arg'l & Bute) | Tellers for the Ayes: |
| Mitchell, Austin (G't Grimsby) | Mr. Frank Haynes and |
| Moonie, Dr Lewis | Mrs. Llin Golding. |
| NOES | |
| Alison, Rt Hon Michael | Baker, Nicholas (Dorset N) |
| Allason, Rupert | Baldry, Tony |
| Amess, David | Batiste, Spencer |
| Amos, Alan | Beaumont-Dark, Anthony |
| Arbuthnot, James | Bellingham, Henry |
| Arnold, Jacques (Gravesham) | Bendall, Vivian |
| Arnold, Tom (Hazel Grove) | Bennett, Nicholas (Pembroke) |
| Ashby, David | Bevan, David Gilroy |
| Aspinwall, Jack | Biffen, Rt Hon John |
| Atkins, Robert | Biggs-Davison, Sir John |
| Blackburn, Dr John G. | Grist, Ian |
| Body, Sir Richard | Ground, Patrick |
| Bonsor, Sir Nicholas | Gummer, Rt Hon John Selwyn |
| Boscawen, Hon Robert | Hamilton, Hon Archie (Epsom) |
| Boswell, Tim | Hamilton, Neil (Tatton) |
| Bottomley, Peter | Hannam, John |
| Bottomley, Mrs Virginia | Hargreaves, A. (B'ham H'll Gr') |
| Bowden, A (Brighton K'pto'n) | Harris, David |
| Bowden, Gerald (Dulwich) | Hawkins, Christopher |
| Boyson, Rt Hon Dr Sir Rhodes | Hayhoe, Rt Hon Sir Barney |
| Braine, Rt Hon Sir Bernard | Hayward, Robert |
| Brandon-Bravo, Martin | Heathcoat-Amory, David |
| Brazier, Julian | Heddle, John |
| Brooke, Rt Hon Peter | Heseltine, Rt Hon Michael |
| Brown, Michael (Brigg & Cl't's) | Hicks, Mrs Maureen (Wolv' NE) |
| Browne, John (Winchester) | Hicks, Robert (Cornwall SE) |
| Bruce, Ian (Dorset South) | Hill, James |
| Buchanan-Smith, Rt Hon Alick | Hogg, Hon Douglas (Gr'th'm) |
| Burns, Simon | Holt, Richard |
| Burt, Alistair | Hordern, Sir Peter |
| Butterfill, John | Howarth, Alan (Strat'd-on-A) |
| Carlisle, Kenneth (Lincoln) | Howell, Ralph (North Norfolk) |
| Carrington, Matthew | Hughes, Robert G. (Harrow W) |
| Carttiss, Michael | Hunt, David (Wirral W) |
| Cash, William | Hunt, John (Ravensbourne) |
| Chalker, Rt Hon Mrs Lynda | Hunter, Andrew |
| Chapman, Sydney | Irvine, Michael |
| Chope, Christopher | Irving, Charles |
| Churchill, Mr | Jack, Michael |
| Clark, Dr Michael (Rochford) | Jackson, Robert |
| Clark, Sir W. (Croydon S) | Janman, Tim |
| Clarke, Rt Hon K. (Rushcliffe) | Jessel, Toby |
| Conway, Derek | Johnson Smith, Sir Geoffrey |
| Coombs, Anthony (Wyre F'rest) | Jones, Gwilym (Cardiff N) |
| Coombs, Simon (Swindon) | Jones, Robert B (Herts W) |
| Cope, John | Jopling, Rt Hon Michael |
| Cormack, Patrick | Kellett-Bowman, Dame Elaine |
| Couchman, James | Kilfedder, James |
| Davies, Q. (Stamf'd & Spald'g) | Kirkhope, Timothy |
| Davis, David (Boothferry) | Knapman, Roger |
| Day, Stephen | Knight, Greg (Derby North) |
| Devlin, Tim | Knowles, Michael |
| Dickens, Geoffrey | Knox, David |
| Dicks, Terry | Lamont, Rt Hon Norman |
| Dorrell, Stephen | Lang, Ian |
| Douglas-Hamilton, Lord James | Lawrence, Ivan |
| Dover, Den | Lennox-Boyd, Hon Mark |
| Dunn, Bob | Lloyd, Sir Ian (Havant) |
| Dykes, Hugh | Lloyd, Peter (Fareham) |
| Eggar, Tim | Lord, Michael |
| Emery, Sir Peter | Lyell, Sir Nicholas |
| Evans, David (Welwyn Hatf'd) | Maclean, David |
| Evennett, David | McLoughlin, Patrick |
| Fallon, Michael | McNair-Wilson, M. (Newbury) |
| Farr, Sir John | McNair-Wilson, P. (New Forest) |
| Favell, Tony | Madel, David |
| Fenner, Dame Peggy | Major, Rt Hon John |
| Field, Barry (Isle of Wight) | Malins, Humfrey |
| Finsberg, Sir Geoffrey | Mans, Keith |
| Fookes, Miss Janet | Maples, John |
| Forman, Nigel | Marshall, Michael (Arundel) |
| Forsyth, Michael (Stirling) | Martin, David (Portsmouth S) |
| Forth, Eric | Mates, Michael |
| Fox, Sir Marcus | Mawhinney, Dr Brian |
| Franks, Cecil | Maxwell-Hyslop, Robin |
| Freeman, Roger | Meyer, Sir Anthony |
| French, Douglas | Mills, Iain |
| Fry, Peter | Moate, Roger |
| Gale, Roger | Monro, Sir Hector |
| Gardiner, George | Morrison, Hon Sir Charles |
| Garel-Jones, Tristan | Moss, Malcolm |
| Goodlad, Alastair | Mudd, David |
| Goodson-Wickes, Dr Charles | Neale, Gerrard |
| Gorman, Mrs Teresa | Neubert, Michael |
| Gow, Ian | Nicholls, Patrick |
| Gower, Sir Raymond | Nicholson, David (Taunton) |
| Greenway, Harry (Ealing N) | Nicholson, Emma (Devon West) |
| Greenway, John (Ryedale) | Page, Richard |
| Gregory, Conal | Paice, James |
| Griffiths, Peter (Portsmouth N) | Patnick, Irvine |
| Peacock, Mrs Elizabeth | Temple-Morris, Peter |
| Porter, Barry (Wirral S) | Thompson, D. (Calder Valley) |
| Porter, David (Waveney) | Thompson, Patrick (Norwich N) |
| Powell, William (Corby) | Thornton, Malcolm |
| Price, Sir David | Thurnham, Peter |
| Raffan, Keith | Townend, John (Bridlington) |
| Rhodes James, Robert | Tracey, Richard |
| Riddick, Graham | Tredinnick, David |
| Roberts, Wyn (Conwy) | Trippier, David |
| Roe, Mrs Marion | Waddington, Rt Hon David |
| Rowe, Andrew | Waldegrave, Hon William |
| Rumbold, Mrs Angela | Walden, George |
| Sainsbury, Hon Tim | Walker, Bill (T'side North) |
| Shaw, David (Dover) | Walker, Rt Hon P. (W'cester) |
| Shaw, Sir Giles (Pudsey) | Wardle, Charles (Bexhill) |
| Sims, Roger | Warren, Kenneth |
| Skeet, Sir Trevor | Watts, John |
| Smith, Tim (Beaconsfield) | Wheeler, John |
| Speller, Tony | Whitney, Ray |
| Stanbrook, Ivor | Widdecombe, Ann |
| Steen, Anthony | Wiggin, Jerry |
| Stern, Michael | Winterton, Mrs Ann |
| Stevens, Lewis | Wolfson, Mark |
| Stewart, Andy (Sherwood) | Wood, Timothy |
| Stewart, Ian (Hertfordshire N) | Young, Sir George (Acton) |
| Stradling Thomas, Sir John | |
| Sumberg, David | Tellers for the Noes: |
| Summerson, Hugo | Mr. David Lightbown and |
| Tapsell, Sir Peter | Mr. Richard Ryder. |
| Taylor, John M (Solihull) |
§ Question accordingly negatived.