TRANSITIONAL PROVISIONS AND SAVINGS

HC Deb 18 May 1988 vol 133 cc1016-43

Mr. Atkins

I beg to move amendment No. 19, in page 16, line 18 at end insert 'any sum by virtue of paragraph 3 above or'. The amendment puts right a minor omission in the Bill and ensures that the Secretary of State remains under a duty to account for any outstanding Government loans made to the corporation before the appointed day that vest in the successor company.

Amendment agreed to.

Amendments made: No. 21, in page 16, line 19 at end insert—

'Pensions and compensation payments

7A.—(1) The repeal by this Act of Schedule 3 to the 1982 Act (pension rights of employees shall not affect—

1. (a) the continuation in force of any pension scheme subsisting immediately before the appointed day in accordance with any regulations which then had effect as if made under that Schedule, or
2. (b) any person's rights or liabilities then subsisting in relation to any pension scheme by virtue of any such regulations.

(2) In sub-paragraph (1) above "pension scheme" means a pension scheme within the meaning of Schedule 3 to the 1982 Act.

7B.—(1) Any provisions of the Iron and Steel (Pensions) (Dependants) Regulations 1969 having effect immediately before the appointed day as if made under Schedule 3 to the 1982 Act shall continue in force (subject to the following provisions of this paragraph) notwithstanding the repeal by this Act of that Schedule.

(2) Any reference to the Corporation in those provisions shall have effect, as respects anything falling to be done or occurring on or after the appointed day, as if it were a reference to the successor company.

(3) Those provisions may be amended or revoked in like manner as if Schedule 3 to the 1982 Act had not been repealed (but the reference to the Corporation in paragraph 4(2) of that Schedule shall be construed as a reference to the successor company).

7C.—(1) Where—

1. (a) any regulations made under section 24 of the Iron and Steel Act 1953 (compensation to employees of certain nationalised companies or of the Iron and Steel Corporation), or
2. (b) any regulations having effect as if made under paragraph 2 of Schedule 4 to the Iron and Steel Act 1975 (compensation to employees of certain nationalised companies or of the Iron and Steel Board).

are in force immediately before the appointed day, any such regulations shall continue in force (subject to the following provisions of this paragraph) notwithstanding the repeal by this Act of paragraphs 7 and 8 of Schedule 6 to the 1982 Act (saving for compensation regulations etc.)

(2) Any reference to the corporation (including any reference which fell to be construed as such a reference immediately before the appointed day) in any regulations continued in force by virtue of sub-paragraph (1) above shall have effect, as respects anything falling to be done or occurring on or after that day, as if it were a reference to the successor company.

(3) Any regulations continued in force by virtue of sub-paragraph (1) above may be amended or revoked in like manner as if the provision mentioned in paragraph (a), or (as the case may be) paragraph (b), of that sub-paragraph had not been repealed (but any reference in that provision to the Iron and Steel Holding and Realisation Agency or to the Corporation shall, unless the context otherwise requires, he construed as a reference to the successor company).'.—[Mr. Atkins.]

Mr. Atkins

I beg to move amendment No. 22, in page 16, line 19, at end insert—

'Savings in connection with transfers to the Corporation

7D. The repeals made by this Act shall not affect—

1. (a) any document or other thing which has effect immediately before the appointed day subject to any modifications prescribed by the Steel Companies (Vesting) Order 1970, or
2. (b) anything not falling within sub-paragraph (a) above (other than an enactment) which then has effect or is continuing subject to, or to modifications in consequence of, the substitution of the Corporation for any other person or body;

but, as from the appointed day, anything falling within sub-paragraph (a) or (b) above shall be further subject to such of the provisions of paragraphs 1 to 3 of Schedule 1 to this Act as are applicable.'.

This amendment is a technical provision designed merely to ensure that the statutory vesting under clause 1 and the subsequent repeal of the 1982 Act do not disrupt existing arrangements or entitlements.

Amendment agreed to.

Mr. Atkins

I beg to move amendment No. 23, in page 16, line 30, leave out 'during that period, shall' and insert 'which is relevant to the making of that distribution, shall accordingly'.

This is a technical amendment that follows precedence in earlier Acts. If the hon. Member for Glasgow, Carthcart (Mr. Maxton) wants me to spell it all out again I shall have to seek advice.

Amendment agreed to.

Order for Third Reading read.

Motion made, and Question proposed, That the Bill be now read the Third time.

8.14 pm

Mr. Crowther

No one in the steel industry, whether employed directly by the BSC or working for a firm in which it has a substantial shareholding, can view the future with anything but great trepidation. Throughout the debates on this Bill, my hon. Friends have tried to introduce changes which would have improved the security of the industry and its work force in various ways. We welcome the minor provisions on pensions, but it seems unfortunate that the Opposition had to press the Government to make even those small concessions. The Government should have thought of them themselves.

Otherwise, the Government have conceded nothing. They are throwing the BSC naked back into the private sector jungle from which it had to be rescued in 1967. The Bill is ideological—nothing else: so much is clear at the end of all these debates. Not the slightest commercial justification for the privatisation of British Steel has been advanced throughout the debates. The Government say only that it belongs in the private sector. Why does it belong there? No one has given us a good reason.

If the BSC belongs in the private sector, why did not the Conservative Government who were returned to power in 1970 put it back there? Why did not this Government put it back in 1979, or in any of the eight subsequent years? We, and they, know the answer. They knew that the industry needed investment on a scale that the private sector could not or would not provide. So they brought in Mr. MacGregor to preside over the destruction of 111,000 jobs, the financial costs of which had to be met by the taxpayers and the social costs of which are still being suffered in steelmaking areas such as mine, where massive unemployment is still the order of the day.

Now, because of these measures and because BSC now has modern plant—thanks to public investment—a greatly reduced work force and a high level of productivity, it is making a bit of profit—but not a lot. So the BSC has to go back to the private sector, which was so disastrous for the industry in the past. It is returning to that sector with no assurance that adequate resources will be available for new investment or that all its present plant will remain open. It returns with no assurance that it will continue to be profitable under the burden of increased electricity charges and the adverse exchange rates that are now beginning to affect it; and with no assurance that it will not be gobbled up by its ruthless foreign competitors. So, an industry which has been brought back to a state of high productivity and efficiency because by public ownership is being thrown back into the jungle. This is a sad day for the British steel industry and all who are associated with it.

8·17 pm

Mr. Kenneth Clarke

I am grateful to the hon. Member for Rotherham (Mr. Crowther) for starting the debate. I am not sure whether he moved the Third Reading—it is unlikely in the light of his comments—

Mr. Crowther

On a point of order, Madam Deputy Speaker. You will recall that no one appeared anxious to make a contribution until I got on my feet. If the Minister had been present, he could have moved the Third Reading.

Madam Deputy Speaker

I confirm that the hon. Member for Rotherham (Mr. Crowther) was the only one who rose at that time.

Mr. Clarke

We all wait for the words of the hon. Member for Rotherham about the steel industry, and I am glad to have conceded the first word to him.

I agree with the hon. Member for Rotherham that the issue we are debating is whether the British Steel Corporation should be owned by the state and remain in the public sector. This is an enabling Bill, to enable the corporation to be turned into a Companies Act company in which the Government will own all the shares for a short time before we proceed to flotation at the end of this year, at the earliest—or as soon thereafter as possible, if that does not prove possible.

The Opposition remain opposed to the whole principle and we have one last opportunity to talk about whether a giant and important manufacturing company such as British Steel will do best as a state-owned company or whether it should be returned to the private sector. The hon. Member for Rotherham said that the company belongs in the state sector. I assume from the gist of most of the Opposition comments during the hours of debate on the Bill that they will restate their preference for state ownership. I have listened to the nuances of the debate during the course of protracted exchanges, and questions arise in my mind about exactly what ground now stands between us and the Opposition.

I am not quite sure why the Labour party continues to prefer state ownership. I am no longer at all clear what form of state ownership the present day Labour party wants. I have listened to the debates but I still do not know what alternative future the Opposition propose for the industry. The hon. Member for Dagenham (Mr. Gould) vehemently refuses to say what any future Labour Administration would do if we proceed to privatisation and return the company to the private sector.

Mr. Gould

rose—

Mr. Clarke

At this late stage, the hon. Member for Dagenham is about to tell us whether the steel industry would be renationalised by a future Labour Government.

Mr. Gould

It may be a late stage for the Chancellor of the Duchy of Lancaster, because he was not a member of the Committee and was not present at any of the Committee sittings. If he had attended, and certainly if he had taken any interest in the proceedings, he would have discovered that, repeatedly, day in and day out, we made very clear our preference for public ownership. We also made clear our view that the status quo has served the British steel industry extremely well. Any mystery that remains in his mind could have been dispelled if he had bothered to listen to or read the many speeches that I and my hon. Friends made in Committee.

Mr. Clarke

Once again, the hon. Gentleman has evaded the question that I put to him. Of course I understand that he has consistently stated a preference for public ownership. By its vote later tonight, the Labour party will be expressing its preference for the status quo. Whether that means that the Morrisonian corporation is in the opinion of the Opposition a desirable and permanent future status for the steel industry is very doubtful.

The Opposition are not clear what form of state ownership they want, and the question that the hon. Gentleman rose to answer is one that he has consistently declined to answer. Given that he and all his hon. Friends know that we will return the corporation to the private sector, will he tell the House whether the Labour party would renationalise it? The Opposition have declined to answer that question. There are considerable difficulties in understanding what the Labour party means by a state-owned industry, and we do not know whether it is still wedded to the Morrisonian corporation, which, by their vote, the Opposition will appear to defend at the end of this debate.

As the hon. Gentleman said, I was not a member of the Committee, but I studied its proceedings. I noted in particular that the hon. Member for Great Grimsby (Mr. Mitchell) who has been very active throughout proceedings on the Bill, although he is not in the Chamber at the moment, said in Committee when discussing a new form of public ownership: Perhaps we should have thought of it earlier, because I concede that there are disadvantages to the Morrisonian corporation which has been the traditional form of nationalisation. The Labour party is thinking actively and strenuously about new varieties of ownership, involving the workers and making commercial returns and imperatives available to nationalised industries."—[Official Report, Standing Committee D, 14 April 1988; c. 524.] That sits oddly alongside the commitment to vote for the retention of the Morrisonian corporation whose existence the Government are about to bring to an end.

I shall try again from another quote. The hon. Member for Great Grimsby said that the amendments that the Committee was discussing propose that British Steel should demonstrate a track record before privatisation. We are not standing in the Government's way and saying, 'Thou shalt not privatise'. We are saying that we should privatise taking into account all the sense and virtues that the Government tell us are to be found in the Conservative party—the feeling of financial markets, financial rectitude and financial responsibility—by establishing a track record before this important national asset is launched on an uncertain sea." —[Official Report, Standing Committee D, 10 March 1988; c.59–60.]

Both those quotations might leave the thought in some people's minds that the meaning is not altogether clear. Given that we are debating the principle of state ownership, the opportunity should be taken to make the meaning clear about the Labour party's position and the vote that it intends to cast.

These curious excursions by the hon. Member for Great Grimsby match some of the statements by the Labour party's allies in the trade union movement. Mr. Roy Evans, the general secretary of the Iron and Steel Trades Confederation, said in the ISTC journal of February 1988: In a highly competitive industry, the most efficient companies will survive and prosper. The industrial relations structure in steel must be rationalised to avoid any possibility of obstacles in the way of efficiency … The road to privatisation is not going to be easy, but we cannot present it without closing down the industry and putting all our jobs at risk. So we should use the opportunity to play a constructive role in creating a modern, profitable and humane industry able to provide guarantees of well-paid jobs for ourselves and our children. That leads us to the problem of the Labour party telling the House only that it prefers public ownership. All it will do is vote against the Bill in an attempt to retain the status quo. We know that that is not an alternative to the policy contained in the Bill and it leads us to a great problem. The Government say that this company will flourish and will be managed better, will perform better and will give a better future to its employees and certainly to its customers in the commercial arena as a private sector company. What is the Labour party saying? It is a listening party and will not have an industrial policy for a couple of years after the next election. The Opposition are in no position to cast a calculated vote for anything.

Dr. Reid

Such is the Minister's grasp of the flexibility with which the Opposition are approaching the whole question of social ownership that I would be tempted to vouch for him as a future Minister in a Labour Government, except that in my hon. Friend the Member for Dagenham (Mr. Gould) we have a better candidate.

The Minister finds it difficult to understand how we can oppose the principle of privatisation while in Committee we suggested ways in which it could he carried out in a better form than the way in which the Government propose to carry it out. May I quote to the Minister the parable that he has not read in Hansard and which I had to give to the Under-Secretary? We are opposed to violence but would rather be slapped in the face than shot through the head. The manner in which the Government are privatising the industry is a shot through the head for the industry, its workers and the taxpayer. We are suggesting within the privatisation format ways in which the Government could improve their approach to privatisation if they are intent on sticking to it.

Mr. Clarke

With respect to the hon. Member for Motherwell, North (Dr. Reid) that is all very well for amendments when the Opposition can claim that they accept privatisation because it is forced upon them and they are seeking to improve it. At the end of the debate, they will vote on the principle of the Bill and will vote for public ownership. I am talking about the flexibility of the hon. Member for Dagenham and wondering where this flexible reasoning is leading the Labour party.

These questions are crucial to Motherwell and elsewhere. What is the future of the steel industry and what do the Labour party propose? The Opposition defend nationalised industry, but what kind of nationalisation do they contemplate? The hon. Member for Dagenham is nodding and I am sure that he will speak on Third Reading. This is my best opportunity so far to discuss the matter with him, and where better than across the Dispatch Box? I thought that I would be discussing it with him on "Newsnight" on 9 May.

The hon. Gentleman emerged as the author of a Labour party document on the future of public ownership and he and I were invited to have a discussion. However, the hon. Member for Dagenham made representations to the BBC and would not discuss the matter with me.

Mr. Michael Foot (Blaenau Gwent)

On a point of order, Mr. Deputy Speaker. We are all fascinated by the fantasies of the right hon. and learned Gentleman, but is it not a convention of the House, preceding even the presence of the right hon. and learned Gentleman in high office, that Third Readings should be devoted to discussing what is in the Bill? It is very different even from Second Reading. When does the right hon. and learned Gentleman intend to come to order?

Mr. Clarke

rose—

Mr. Deputy Speaker (Sir Paul Dean)

Order. I am grateful to the right hon. Member for Blaenau Gwent (Mr. Foot). I have only just come to the Chair and I am getting the distinct impression that both Front Benches are probably not keeping to the straight and narrow. May I remind the House that Third Reading speeches must be confined to the contents of the Bill?

Mr. Gould

On a point of order, Mr. Deputy Speaker. The Opposition Front Bench has not yet risen to take part in the Third Reading debate.

Mr. Deputy Speaker

I was going by my impression of the atmosphere of the House, and I am looking to both Front Benches to set a good example to assist the Chair.

Mr. Clarke

I accept your guidance, Mr. Deputy Speaker. I have the greatest respect for the right hon. Member for Blaenau Gwent (Mr. Foot), so if I talk about his seniority, it is not out of disrespect. The old Labour party has risen to the rescue of the new. It may be—I accept your ruling, Mr. Deputy Speaker—that protracted discussion about the position of the Labour party is as impossible on this occasion as it proved to be on "Newsnight". Nevertheless, it is relevant to the content of the Bill and to whether or not the Bill will receive the support of the House that we should know what is the Labour party's view of public ownership.

I am sure that it is not beyond the ingenuity of the hon. Member for Dagenham to help us, although I know that he and his hon. Friends have avoided this question for at least 80 hours in Committee and many more on the Floor of the House. The Labour party has the opportunity—I am sure that it can slip it in within the rules of order—to give us some enlightenment about what kind of nationalised industries it now favours and what kind of nationalised industry it is seeking to defend.

I shall revert to order. The right hon. Member for Blaenau Gwent wishes to know about the Bill. It is an enabling Bill, which will enable the Government to transfer the status of British Steel from a public corporation to a Companies Act company in which the Government will own all the shares. The Government intend to sell the shares at an appropriate time, thus returning British Steel to the private sector—the right and proper place for it. The Bill does not dictate the timing or manner of privatisation, but as I have told the House, it is our intention to privatise British Steel as soon as is practical and as a single entity in its present configuration.

The essence of the Bill is that all the property, rights and liabilities of the corporation will vest in a successor company. That company will be a Companies Act company, limited by shares that will be wholly owned by the Government. Therefore, while there will be a change in the legal status of British Steel, from corporation to plc, there will be no material change in its commercial activity or the extent of its assets and liabilities.

The successor company will require a capital structure compatible with the requirements of the Companies Act. Therefore, the Bill makes provision for the necessary financial restructuring of the corporation. These provisions constitute simply a rearrangement of the balance sheet and are not a write-off of liabilities or a subsidy. We discussed this at length on Report. No money changed hands at any stage. The first step is to reduce the corporation's public dividend capital in order to write off past trading losses so that the capital shown in the balance sheet will accurately represent the value of the assets. This process is not a write-off of debts. Past trading losses are not debts—they are a record of past losses which have been incurred, accounted for at the appropriate time, and recorded in the balance sheet. They represent public money that is lost and gone for ever, during the record of the company as a nationalised company.

It is not true to say, as Labour Members, including the hon. Member for Rotherham, have tried to imply throughout our debates, that the taxpayer will receive a raw deal either from the capital reduction or from the privatisation. It is a completely unrealistic estimate of what the taxpayer ought to receive to say that he should receive back all the money that he has put into the corporation in the past. That money has been used to fund past trading losses. It represents the cost of keeping uneconomic capacity going for too long and it also met the costs of rationalisation. That money is lost and gone. It represents in large measure the cost of imposing decisions on the business that often did not accord with commercial realities, and it is unrealistic to suggest that the money should be repaid.

If the Opposition were to win the vote this evening, that money would never, and could never, be repaid. The corporation has not paid a dividend since 1975. Even with the payment of a large and regular dividend from now on, the corporation could never repay to the state what it has received from it, and it is unrealistic to think otherwise. The taxpayer will get the best available terms through privatisation, because whatever value is realised from the proceeds of the sale would be considerably greater than whatever is realised in many years of dividend payments.

That is the essence of the Bill, and that is in order. The House is riveted by a speech that is in order on Third Reading, but I hope that my minor excursion earlier will arouse a somewhat wider response from the hon. Member for Dagenham. He shares with me the view that this is a vital industry, and we wish British Steel and those who work in it great success in the future. When the hon. Member was talking about the importance of such utilities on the programme to which I inadvertently returned earlier, he said: When you see the document you will see we set out our broad approach, which certainly talks about the general and unique importance of the major utilities as servants of the economy, as deliverers of services to consumers, as providers of essential facilities to the national economy. And that leads us to certain conclusions. But we don't, by any means, rule out, indeed we specifically recognise that in some instances some form of ownership, or control, in addition to the regulation that we initially refer to, that some form of ownership or control may well be required. He then set out some options. He continued: But we have yet to do the work which will enable us to decide exactly what form that should take, and in what instances. That is his policy. Ours is the one that I have described and that is embodied in the Bill, and ours is a tribute to the success of the corporation and its work force.

We recognise the enthusiasm and commitment of the management and the work force, which have turned around the performance of the corporation. That is why the package of benefits that I have described will be available to the employees on flotation. We anticipate that, on its return to the private sector, BSC will continue to thrive. It will be better able to respond quickly and flexibly to the market conditions. It will not be subject to the control of the Treasury or Ministers. It will not, thank heavens, be subject to the trade union control that the Opposition were urging upon us as an improved form of private sector ownership.

The BSC is now one of the most profitable steel producers in the world. Its record of achievement in recent years is impressive and the results are plain for all to see. It has continued to invest in its business and to improve efficiency and productivity. We believe that British Steel's future is best assured in the private sector, subject to no more and no less a degree of Government regulation than any other private sector company.

The Bill enables the Government to set in motion the transformation from nationalised corporation to private sector plc. We know what we want. We have an extremely clear policy. We believe that this policy is backing the BSC and all who work in it, and offering them a better future. I do not believe for one moment that the Opposition have the slightest idea of what they propose to do with the steel industry or any other major industry, yet they are about to cast a vote that clings to the old Morrisonian corporation because they cannot think of anything better and they certainly cannot agree among themselves on anything better. As we have a clear policy, taking forward the logic of our position, I commend the Third Reading of the Bill to the House.

8.37 pm

Mr. Gould

I suppose I should find it flattering that the Chancellor of the Duchy of Lancaster tried so hard, even though it meant that he strayed out of order, to deal with remarks that I have made on television rather than trying to explain the Bill. However, I will not follow him in that course because I propose to stay in order and devote my brief remarks to the Bill. After all, the Government have introduced this Bill and we must respond to it. I hope that the Chancellor will be satisfied by the end of my speech, and that he will realise that our position is clear.

The Bill began with the statement that the right hon. and learned Gentleman made on 3 December, but it began with a mystery. We tried to unravel that mystery in Committee, in a process that took many hours, during which we had to do without the help and assistance of the Chancellor. Despite our hard work, we got nowhere near unravelling the mystery of why the Bill was introduced at this time. We learned a little more about the Bill, but not much. Ministers were not very forthcoming about the reasons for its introduction and were extremely shy about answering one specific question. It may be that, now we have the Chancellor here, I will be able to do what he could not, and ask a question that is in order. Why was the Bill suddenly introduced when it had not been presaged by any reference to it either in the Conservative party manifesto or in the Queen's Speech?

We found that puzzling. Rather fruitless efforts were made by some Ministers in Committee to assure us that all sorts of footling little measures might be slipped through without being mentioned in the Queen's Speech, but that is not a good answer. We thought that that answer did not attach sufficient importance to this measure. If, as we suspect, the Government regard it as an important measure, it would have been reasonable to expect some reference to be made to it in the Queen's Speech.

Of course, as the Chancellor knows, reference was there none. We are interested to know why, between drawing up the Queen's Speech and the Conservative party manifesto and the statement on 3 December, there was some sudden change of heart and some reason was considered to be sufficiently pressing to induce the Chancellor and his Department to bring forward the Bill. We received no answer in Committee, but I hope that the Minister will now offer us an explanation.

Mr. Kenneth Clarke

I am sure that the hon. Gentleman will recall that statements from Conservative Ministers that the aim of the policy of this Government was to return the British Steel Corporation to the private sector as soon as it was practicable and reasonable to do so go back to well before the last election. It is true that there was no specific reference to it in the manifesto, but there was in speeches, and there certainly was in the campaign guide produced by the Conservative party, which I am sure is consulted as regularly by those at the headquarters of the Labour party as it is by those at the headquarters of the Conservative party.

In the course of the year, British Steel's recovery became so fast and so strong that it was quite obvious—certainly when we received the half-yearly results—that its performance had reached a stage at which it was ready to return to the private sector, and therefore we proceeded. It was trailed in the Gracious Speech by the words Other measures will be laid before you."—[Official Report, 25 June 1987; Vol. 118, c. 40.] Other measures were.

Mr. Fallon

Will my right hon. and learned Friend give way?

Mr. Clarke

If the Government can move so steadily and purposefully towards our stated intentions, why does it take the Labour party so long to decide whether it will renationalise the company once we have returned it to the private sector?

Mr. Gould

I am surprised that the Chancellor should follow the faltering footsteps of his junior ministerial colleague, as that is exactly what he told us in Committee. We found it pretty unconvincing; the whole Committee found it pretty unconvincing. Judging by the attempt of the hon. Member for Darlington (Mr. Fallon) to intervene in the Minister's intervention, I suspect that he too found it pretty unconvincing.

Mr. Fallon

I intervened to help not the hon. Gentleman but my right hon. and learned Friend. There is a much clearer and more obvious text than that rather dubious phrase from the Queen's Speech. If the hon. Member for Dagenham (Mr. Gould) will look closely at the 1987 Conservative manifesto, he will find a sentence reiterating the Government's commitment to returning all state industries to the private sector. The British Steel Corporation is a state industry; therefore, it is being returned to the private sector.

Mr. Deputy Speaker

Order. I hope that we shall not spend too long on manifestos. We should be discussing the Third Reading of the Bill.

Mr. Gould

I am very happy to do so, in the comfortable knowledge that the hon. Member for Darlington has agreed that the reason advanced by the Chancellor is pretty dubious. We are all agreed on that.

The origins of the Bill go back not just the few years to which the Chancellor referred, but perhaps 25 years. That is as long as Conservative Ministers have promised to privatise the steel industry. The very generality of the commitment, as the hon. Member for Darlington explained, and its long history lead us still to be puzzled about why the Bill was brought forward with so little fanfare and so little notice. That mystery remains unresolved.

A possible explanation which, to some degree, is borne out by what the Chancellor has just said is that it suddenly occurred to the Chancellor, the Secretary of State and his Department, that a window of opportunity had opened. That window of opportunity was based entirely on the current, but possibly short-lived, profitablity of the British Steel Corporation. With their very sensitive regard for the competitiveness and profitability of British industry, they knew that that window of opportunity would close very shortly. Perhaps they knew last year that the Prime Minister would win the famous battle over the exchange rate, and that the pound would rise to the dizzy heights of DM3.18, or whatever it stands at today, and that that would place a very large question mark over the prospects of the steel industry and the corporation.

For all those reasons—one can picture the scene—those very wise and clever people who sat with us throughout the passage of the Bill in Committee and who are present in the box today said to the Minister and to the Secretary of State, "It looks good for the moment, but if you want to privatise it and get some sort of price from the market, you had better do it in a hurry." That is why the Bill was suddenly rushed forward.

As my hon. Friend the Member for Rotherham (Mr. Crowther) made clear, once one has unravelled the mystery, the Bill is clearly born of ideology. There is all the familiar rhetoric of liberalisation, competition and the drive for efficiency, but none of that hangs together. The hon. Member for Darlington and I probably agree that yesterday we established that none of that could apply, since privatisation had nothing to do with liberalisation. In this instance, it was the very careful preservation of monopoly. Therefore, there is no reason to expect a privatised British Steel Corporation suddenly to feel the full force of market pressures because nothing will change, except that this time, instead of being publicly accountable, the industry and the corporation will be answerable only to those who want to make an immediate profit.

Throughout the Committee, and again yesterday, the astonishing doctrine was advanced that we need not worry too much about the monopoly which was being enshrined in this form of private ownership because British Steel, even in its new privatised form, would be kept under control by the market pressures exercised by imports. By implication, we were asked to conclude that the level of imports and the penetration of imports in the British market—no doubt that applies across the board to cars, ships and manufactured goods—is nothing to worry about. Indeed, it is to be applauded as a great success of Government policy.

As the tide of imports washes over British industry, closes down British firms and throws British workers on the dole, as the level of import penetration rises for virtually every manufacturing industry, it is to be regarded as a great triumph as part of the Government's much touted but extremely elusive competition policy. They do not have much else by way of a competition policy. We look in vain for the criteria which they might wish to apply. Ever-rising imports are the Government's competition policy. That is an extraordinary doctrine, which certainly is rejected by the Opposition.

Stripped of all the rhetoric and dogma about competition, efficiency and liberalisation, as the right hon. and learned Gentleman made clear in his speech, there is the simple belief, unsustained by any evidence—a gut feeling, no doubt—that it is right for the industry to be in private hands and that the concept of private ownership and the search for private profit, whether it produces better or worse performance, or whether it increases efficiency, do not matter; the mere fact of private ownership and private profit is ipso facto a good thing.

The Minister and his right hon. and hon. Friends are entitled to that view, but we are entitled to ask for a little more evidence. We are not convinced by that simple assertion of faith by Ministers, because we are prepared to look at the experience of the ownership of the industry. We know, and Ministers know, that, historically, the private ownership of the industry has been a disaster. Time and again, private owners have not been prepared to make the long-term commitment and investment in an industry which is essentially cyclical.

It is in the nature of private ownership and private owners and the drive for private profit which is so admired by Ministers, it is in the nature of that attitude towards industrial ownership, that when the going gets rough one bails out, closes down capacity, and abandons the industry. That pays no attention whatsoever to the national economic interest, to the rest of the industry or to the work force whose livelihoods depend on that industry. That is in the nature of private ownership. Because there is no match between the short-term interests of private owners and the long-term need of the industry for a commitment and an investment pattern to carry on through the troughs as well as the peaks, private ownership has consistently failed the steel industry. That is why we are in no doubt that the Bill must be opposed. We believe that it jeopardises the future viability of an essential British industry.

If the industry were placed at risk, as we believe that it is by this measure, it would matter considerably to the British economy. The Minister recognizes—at least, he mentioned it in his speech—the importance of the industry. There were occasions in Committee—we had long debates on this sort of issue—when Ministers and others suggested that the industry has a certain importance but that they can take it or leave it. They seem to think that it is no different from any other industry and that if it went down a little it would not matter. We do not take that view. We believe that it is a strategically important industry. It is perhaps not at the commanding height that it once was because we recognise that new technology and new production methods have introduced new materials and so on. However, it is still an industry of major strategic importance.

There was some debate in Committee as to what was meant by the word "strategic". Effort was made to limit its meaning to its military sense. Of course there is a military sense in which steel is strategically important; I accept that. However, it is strategically important in a wider sense. It is one of the foundations and sinews of our industrial economy. If we were to have a substantially weakened steel industry by virtue of the failures of private ownership, I am certain that we would be dealing a mortal blow to much of our industrial economy.

The Government may be willing to get shot of the industry on almost any terms for reasons of their own ideology. They may be prepared to take that sort of risk with our industrial future. We do not believe that that risk is justified. For the avoidance of doubt—there have been occasions during the passage of the Bill when doubts have been expressed by Conservative Members—let me make it clear—I have the authority to speak on behalf of the trade unions as well—that we are opposed to privatisation. That is why we will vote against the Bill.

It is true that, while repeatedly and firmly making our opposition to privatisation clear, we have also been realistic enough—when we are not realistic enough we are criticised, and quite rightly—to recognise that, with the Government's present majority, it is likely that the Bill will reach the statute book. As well as expressing firmly our reasons for opposing the principle of the Bill, our duty and obligation has been to try to ameliorate its bad effects as best we can. I am sorry to say that we have had little success in doing that, partly because the Bill concentrates on the relatively narrow objective of restructuring the British Steel Corporation, but partly because Ministers simply rejected any argument on the basis of a simple ideology which we reject.

We have tried to ameliorate the short-termism built into the Bill. We object to the emphasis on private profit, the emphasis on profitability now and in the immediate future. We object to the fact that that means that attention is diverted from the investment that is so badly required. We have tried repeatedly in various ways to ensure that investment is recognised as an obligation of the new owners, whoever they may be. The Minister and the Government have resolutely resisted those attempts.

We have been extremely concerned for employee representation in varying ways. The concept of worker directors, which has worked extremely well in the British Steel Corporation until now, is to be lost. Ministers have expressed little concern about that. We believe that that is important and would have been an important amelioration of the Bill.

We are extremely concerned about the inadequate protection against takeovers, particularly foreign takeovers. It is true that the Government brought forward a limited provision on a special share. However, they found themselves constrainted by the requirements of the EEC Commission, and the protection offered is extremely limited and is time-limited as well. Therefore, we do not believe that that is adequate.

Virtually no attention is paid to the pressing and specific problem of Ravenscraig. We have taken the opportunity at every stage during the passage of the Bill to express our concern for the future of that great steel plant. Nothing in the Bill enables us to tell our constituents and those in Scotland who voted for us that Ravenscraig's future is assured. All the evidence and logic is that privatisation is simply a means of shuffling off responsibility for the decision as to Ravenscraig's future and that that decision will be disowned by the Government, when and if the time comes.

There is much to object to in the Bill. As I have said, our attempts to ameliorate it have been largely unsuccessful and that is why we return to the principle. The Government simply do not recognise the obligations of this great industry to the national economy. The Government, for ideological reasons, are blind to the evident risks that are run by handing it over to private owners who have so often failed the industry in the past. We believe that the best future for the industry is in public ownership and that is why we oppose the Bill and will vote against Third Reading.

8.56 pm

Mr. William Powell

I congratulate my right hon. and learned Friend the Chancellor of the Duchy of Lancaster and my hon. Friend the Under-Secretary on successfully piloting the Bill through Second Reading, the Standing Committee, of which I was privileged to be a member, Report and Third Reading. The Bill is of considerable importance to the country and will enable the British Steel Corporation to operate without the shackles that the state has so often imposed upon it.

The hon. Member for Dagenham (Mr. Gould) talked about private ownership being a disaster for the steel companies in the old days. Those of us who served on the Standing Committee will never forget the speech of the hon. Member for Motherwell, South (Dr. Bray) in moving the first of his amendments. I am delighted to see that he is in the Chamber. The hon. Member moved a number of amendments and always made interesting contributions to our proceedings. However, none of his contributions was more interesting than the speech he made on the first set of amendments he proposed. The hon. Gentleman has experience in such matters and he talked about the relationship that existed between the chairman of the British Steel Corporation and Labour Governments of which he was a member or with which he was closely associated.

I invite all hon. Members and members of the public to read our proceedings and I should like them to refer particularly to the proceedings in Committee. They should look closely at the speech of the hon. Member for Motherwell, South because it was a seminal speech. It set out the reasons why nationalisation and the relationship between Ministers and the BSC was so disastrous both for Ministers and the corporation. It explained why it is necessary that Parliament should pass a measure that will mean that such things will never occur again. I am fully aware that the hon. Gentleman thought that he was advancing a case in favour of public ownership, but no Conservative Member who heard his remarks will have identified them as anything other than a classic illustration of the reasons why nationalisation has been a disaster for the British Steel Corporation. The Bill will end that once and for all.

I have the privilege to represent a constituency which still has a residual steel interest. My constituents remember with nostalgia the days of Stewart and Lloyd, whose operations in Corby made a profit every year. They are less impressed by the fact that British Steel's operations in Corby have made a loss every year since nationalisation. They recall—how could they ever forget?—that the coupling of Stewart and Lloyd's tube works with the British Steel Corporation led to industrial catastrophe in the late 1970s.

Lest Opposition Members feel that restructuring in the steel industry occurred under a wicked Conservative Government, I remind them that the important day for Corby was 3 March 1979—some two months before the general election that brought this Government to power. It was on 3 March 1979 that British Steel announced that it would close the Corby steelworks. Restructuring has taken place under Conservative and Labour Governments alike.

I do not accept Opposition Members' contention that private ownership has been a disaster for the steel industry—far from it. Private ownership worked, and worked well, in Corby and in many other places. I am certain that when British Steel is privatised, its work force—in Corby or elsewhere—and its shareholders will find that it works much more successfully than it has with the intervention and interference that have been such disfiguring features of nationalisation.

I welcome the Bill, and my constituents will welcome it. I have listened with interest to the Opposition's case against privatisation. I have fought two general elections in a steel constituency—one of them less than a year ago. I never sought to hide the fact that I was in favour of privatisation. Privatisation was not a great issue between my Labour opponent and myself a year ago, although my opponent was a distinguished and popular official of the ISTC. We did not argue about the merits of privatisation. There was considerable discussion of the terms for British Steel pensioners after privatization—and quite right too. There was considerable concern to ensure that those who work in the industry are given the best possible opportunity to acquire a stake in the industry—and quite right too. However, the fundamental question whether the industry should be in the public or the private sector was not a matter of great party political controversy in my constituency.

I respect the fact that Opposition Members, the ISTC and other unions would prefer the industry to remain in state hands. Nevertheless, I am in no doubt that under the Bill the future prosperity of those who work in the industry will be more assured than it could ever be in the state sector where it would be dependent on all the factors that govern state financing and the public purse.

As I said, I welcome the Bill and I wish it fair speed. I hope that it will receive substantial approbation in another place. All being well, it will reach the statute book before the summer recess and in a few months the steel industry will be returned to the private sector, like so many other industries and with the same success. There is nothing to fear and everything to look forward to in that prospect. The industry can continue to build on the restructuring on which Ministers have insisted in the past few years. With a tried and trusted leadership and an experienced work force, knowing that it has a good future, the prospects for British Steel have never been better.

9.3 pm

Mr. Foot

I may have caused the Chancellor of the Duchy of Lancaster some inconvenience by intervening on a point of order in his speech. I do not necessarily apologise for that, but I should like him to appreciate my excellent reasons for doing so, it seemed to me that he thought that he was appearing on the "Newsnight" programme rather than in the House of Commons, and I thought it courteous to draw his attention to that misapprehension. It is not because I dislike him in any sense, either in the House of Commons or on television. I prefer him to some of his colleagues—particularly the right hon. Member for Chingford (Mr. Tebbit). I do not want to pay the right hon. and learned Member any reckless compliments, but I much prefer him to his right hon. Friend.

I return to that part of the Chancellor of the Duchy's speech that was in order. He referred to the achievement of the steel industry, and he was right to do so. It was one of the factors that led to the presentation of the Bill. On the figures given in recent months, there have been considerable achievements at the British Steel Corporation. Sir Robert Scholey deserves considerable credit for that; he should have been appointed to his current position some time ago, because he was doing most of the real work. He has had the assistance of those who have been prepared to confront the industry's appallingly difficult transformation, which has imposed huge burdens upon the communities involved, such as my own. It is because we in the steel communities know the difference between public and private ownership that we are so bitterly opposed to the Bill, despite the industry's achievements over recent months.

Those considerable achievements would not have been possible, as my hon. Friend the Member for Dagenham (Mr. Gould) so skilfully underlined in his speech, had it not been for the different forms of investment, the greater foresight and the long-term planning which public ownership offers an industry such as steel. I can cite my own constituency by way of illustration. Had it not been for the £70 million or £80 million invested in the tin plate and finishing plant in Ebbw Vale in 1978 and 1979, it would not have had the slightest chance of surviving into the late 1980s as it has done. I hope that it will carry on for the next 10 or 20 years.

That investment would not have been made—I am certain that the same applies to Ravenscraig and to other places—and carried through, partly under a Labour Government and partly under their successors, at a time when many European steel industries were being knocked out altogether, had it been in private ownership. Yet that investment allowed it to survive and has enabled the Chancellor of the Duchy to talk about a prosperous steel industry.

It was not only that long-term investment which was important to the steel industry. There was all the accompanying investment necessary to carry through the change from the older industries to the new. It is false to make the charge sometimes made against the Labour party, that it was not in favour of those changes. We understood that they were needed in many areas, such as Corby and Ebbw Vale. However, we said that the pace of that change should be one that the communities involved could absorb, and that the rundown should be accompanied by the introduction of new industries in a planned way. I will not say that we carried out that philosophy perfectly, but we undertook it on an intelligent and planned basis, whereby the steel industry itself provided special investment in many of the new industries introduced into those areas.

The Labour Government invented the British industries enterprise scheme. We introduced it as part of the effort to ensure that the rundown of the steel industry should go forward only as we were bringing in new industries. It was all part of our scheme to ensure that the balance was kept and that we should not be thrust through such a change with 25 per cent. unemployment, which is what we have had since 1979–80. It is bad enough to have to try to carry through a change on that scale with the 5, 7 and even 12 per cent. unemployment that existed before 1980, but there is a considerable difference between carrying out such a process on the basis of 12 per cent. unemployment and doing so on the basis of 20 or 25 per cent. unemployment, which is what we have had ever since 1979–80.

We had a much better idea of how the change should be carried through. Part of it was that the money allocated to the steel industry, and part of the investment programme, should be accorded to the planning. I remember Mr. MacGregor coming in with all his brilliance and foresight and saying, "We cannot have anything to do with this. It is not the Government's business to provide the other industries. We must concentrate solely on the market." That was the only test that he was able to provide. We stopped him doing it then, and even the present Government stopped him applying the same doctrines to the coal industry a little later. He did enough damage in many other directions, but we checked much of the damage at that time.

If the Chancellor of the Duchy of Lancaster had studied these matters a little more carefully, he would never have brought forward a Bill which does not take into account all the other aspects of the effect on the steel communities and the communities that still have to carry through many of these changes. We will oppose the Bill bitterly and will vote against it, which will not surprise the right hon. and learned Gentleman. When a new Labour Government come in—which I trust will happen very soon—one of their major objectives will be, I am sure, to restore to our communities which have been so ravaged by the right hon. and learned Gentleman and his friends the compassionate, intelligent, long-term planning that only public ownership can provide in such great industries.

9.12 pm

Mr. Fallon

First, let me clear up the misapprehension on the Opposition Benches that the contents of the Bill were not foreshadowed in the Conservative manifesto. The quotation from the manifesto—I am trying to help my right hon. and learned Friend the Chancellor of the Duchy—runs as follows: We will privatise more state industries in ways that increase share-ownership, both for the employees and for the public at large. Let there be no doubt on Conservative Benches that the Bill is fully consistent with the aims of our manifesto. I know that my right hon. and learned Friend prides himself on being on the more radical wing of our party, and he may think that he is in advance of that manifesto, but the plain fact is that the proposals to privatise British Steel are fully consistent with our manifesto and do not result from any last-minute decision during the autumn.

Mr. Gould

I am grateful to the hon. Minister—[laughter.] I am grateful to the hon. Gentleman—he may well become a Minister. As he seems so much more familiar with the hidden meaning of the opaque words that he has just read out, perhaps he could enlighten us on what other specific industries not yet mentioned in any Queen's Speech, or figuring in any legislation, that form of words now covers. Clearly, he can enlighten his right hon. and hon. Friends on his own Front Bench as well as the rest of the Chamber.

Mr. Deputy Speaker

Order. I have allowed every hon. Member a preamble, and I hope that the hon. Gentleman, if he is going to respond, will do so briefly.

Mr. Fallon

The hon. Member for Dagenham (Mr. Gould) will have observed—certainly, he will have done so by 10 pm—that the number of state industries is diminishing. All that I will say is that it ought to be further diminished.

We are now reaching the end of Report and Third Reading, and I feel that we are entitled to wonder yet again at the generosity of my right hon. Friend the Leader of the House in allocating two full days to the Report stage. I appreciate that there may have been some embarrassment on the Opposition Benches about the meagre part played by Opposition Members in Committee, as a result of which we have had to stretch out the proceedings over two days. Barely half a dozen Opposition Members have been present and they have presented a string of muddled and inconsistent amendments.

Opposition Members said, first, that they opposed privatisation. Then they tabled an amendment calling For a Celtic steel company comprising the Ravenscraig and Welsh plants. They then complained that the British Steel Corporation would be a monopoly, yet, a few hours later, they moved an amendment requesting that it be protected from competition and takeover. They then said that there was no demand for shares. yet, a few hours ago, they moved an amendment suggesting that one third of all the shares should be given, in trust, to the work force That is a wholly inconsistent and muddled approach.

I do not want to labour the Labour party policy, because that would stretch the rules of order on Third Reading. This is not simply a debate between the Front and Back Benches. The steel workers in my constituency will study the Bill carefully when it is passed. The first question that will occur to them is what will happen to the Act if a Labour Government ever come to power again. Will it be repealed? What will be the policy of an incoming Labour Government? I appreciate the difficulties of the hon. Member for Dagenham in completing his series of speeches, listening to the New Zealand Minister for Finance and working on his economic review, but he owes it to the steel workers in my constituency to leave them in no doubt that the industry will not be renationalised if a Labour Government come to power.

As my hon. Friend the Member for Corby (Mr. Powell) well illustrated, the BSC work force is now in much better shape than Her Majesty's Opposition. The work force understands the requirements and is looking forward to being a great private British company.

There will be no greater welcome for the change than on Teesside. It should not be forgotten that many of the steel plants are in areas of high unemployment and assisted areas in Scotland, Wales and the north. For far too long, those areas have depended on the decisions taken by politicians in London which have then been overruled by Treasury Ministers or civil servants. Why should not people in those areas and working in those industries have the same freedom and opportunities to progress, to manage their businesses and to make a success of those industries, free from bureaucracy and control?

The Bill is part of that process, and clauses 1 and 10 have implications for a company in my constituency, which is a perfect illustration of why the corporation should now pass into private ownership. Darlington and Simpson rolling mills is a major company, half owned by British Steel and half owned by Norcros, a company that enjoys the benevolent chairmanship of my hon. Friend the Member for Wokingham (Mr. Redwood).

That half-and-half ownership means that all the key decisions on investment, management, exploring new markets and developing new technologies have to be referred to two different owners and two different managements. It is impossible for the management and work force of that company to be in charge of their own destiny. When the Bill is enacted, that company will be free to build up its own sales, to explore new markets and to develop new technologies without being partly answerable to state bureaucrats in London.

The Bill is important for the regions and, above all, for our economy and for those who work in the steel industry. Had I been told even in 1983 that within five years the BSC would be passing on to the open market I might have had my doubts. It is an enormous achievement. It is a testimony to the strength of the economy, the strength of our commitment to free enterprise, and above all, to the Department of Trade and Industry, the Department for enterprise, that in a single parliamentary Session, with the passage of the Bill, the BSC will join parts of British Shipbuilders and the Rover Group in the market sector. Places that we thought were trapped for ever in the dependency culture—Longbridge, Govan and Ravenscraig—will now be free-standing parts of successful companies.

It is an achievement not only for Ministers, but, above all, for the work force. The BSC work force made the transformation possible. The improvements that it has succeeded in making in productivity and performance, the necessary job losses that it had to accept and its commitment and enthusiasm are the best possible guarantee of the success of the sale of this corporation.

Conservative Members salute that achievement in passing the Bill. It is a crying shame that Opposition Members cannot likewise salute our British steelworkers.

9.20 pm

Mr. Hardy

The Treasury Bench will be grateful to the hon. Member for Darlington (Mr. Fallon), but I do not know whether the steel workers of Darlington will be. The hon. Gentleman told the House what he would say to them, and he asked us what we would say to our constituents who may be adversely affected by this measure.

I wonder whether he will tell his steelworkers—I shall certainly tell mine—that the Bill offers serious disadvantages to them and perhaps to Britain. For example, the Bill's horizon is five years and there is no certainty beyond that. There is no certainty about investment, or the future of research and development or ownership. The hon. Gentleman may be happy to see others come and buy his steelworks and make his workers dependent on those who may not have this country's interests at heart, but we are certainly not.

My hon. Friend the Member for Rotherham (Mr. Crowther) and I are anxious about the future of United Engineering Steels' Rotherham works. I recall, as my hon. Friend, who was then the mayor, will recall, the considerable demonstration of co-operation between management and workers when we set up the Thrybergh bar mill and broke world records, which are still held, for production and the speed of commissioning. That was not achieved because we had some peculiar owner who was not even identifiable. It was done because workers and management together recognised that they could make a substantial contribution to the national interest. Where will that motivation be when this Bill becomes law and the BSC has been privatised?

The hon. Gentleman may feel that he is doing the workers a favour by offering them £70-worth of shares free. My workers in the Thrybergh bar mill in Aldwarke and those working in Concast in my hon. Friend's constituency would prefer to know that investment would continue and be aware that management would be responsible to them and the nation rather than to some foreign interest which may not even want the British steel industry to survive. That fear may well not be compensated for by £70 of free shares.

Ministers have sought to distract our attention by asking what the Labour party policy is. I hope that it will continue to be a commitment to ensure that the United Kingdom creates wealth. That must be the priority of my party. That aim has been sadly neglected throughout the 1980s. The Government and the Conservative party have been eager not to give priority to the creation of wealth, but to give rewards and recognition to those who shift money about. In my area, we do not have much money to shift about.

The hon. Member for Brigg and Cleethorpes (Mr. Brown), who was smiling a moment ago when I referred to the need to create wealth, may be seeking in his way to undermine the capacity of areas like mine to maintain their wealth. I notice that he removed himself rapidly from a steel constituency at the general election. His footwork may be admirable, like that of many other practising politicians on the Conservative Benches, but the commitment and wisdom which they have revealed, and continue to reveal in the Bill, will ensure that the steelworkers in their constituencies, or in his case in the constituencies nearby, will realise that the Government have no commitment to Britain. to wealth, to markets, to research and development or to ownership and very little commitment to anything which we regard as a necessary long-term consideration of this essential industry.

9.25 pm

Mr. Tim Janman (Thurrock)

Like my hon. Friend the Member for Corby (Mr. Powell), I served as a member of the Standing Committee and I add my congratulations to the Chancellor of the Duchy of Lancaster and to the Under-Secretary of State for guiding the Bill through Second Reading, Committee and now Third Reading.

It was an interesting Committee to take part in, not just because there were many occasions on which a new Member like myself could observe how Opposition Members tested the Chairman's patience as to how far they could extend the elasticity of the remit of the matter under debate.

Another interesting aspect was that a high proportion, if not 100 per cent., of the New Zealand contingent of the British parliamentary Labour party were members of the Committee. In the light of the recent speech of the Finance Minister for New Zealand, and because of the general drift of the policies of the Labour Government of New Zealand over the past few years, throughout the Committee we hoped that part of the enlightenment which has got through to the Socialist Administration in New Zealand would reach the heads of the Opposition Front Bench spokesmen. Alas, we still wait.

Mr. Michael Brown

I can give my hon. Friend some help. There is a rumour that the hon. Member for Great Grimsby (Mr. Mitchell), who entertained us well in Committee, is about to go to New Zealand. Perhaps he will find out how things should be done and come back with the correct solution.

Mr. Deputy Speaker

Order. Every hon. Member has been allowed a little preamble, but I remind the House that we are dealing with the Third Reading of the British Steel Bill in the United Kingdom, not with anything in New Zealand.

Mr. Janman

I thank my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) for his intervention. I hope that when the hon. Member for Great Grimsby (Mr. Mitchell) comes back he will reflect on the statement which he made in the House last night, that the Opposition remained totally opposed to denationalisation of the British steel industry. If the Opposition are honest with themselves, with us and with the country, they should continue to make it clear that in their gut they are still totally committed to nationalisation of the key core industries. Because they know that the vast majority of the electorate understand that nationalisation has been a recipe for complete economic failure, they dress it up with fancy terminology to try to hide from the electorate the fundamentals of their industrial policies.

Mrs. Margaret Ewing

rose—

Mr. Janman

I will not give way, because time is short and other hon. Members wish to speak.

It is not the Government who are ideological. We believe in the natural way of doing things. The use of economic resources should be dictated by customers, investors, shareholders and the people who manage industry in recognition of the competitive forces and the profit motive that guide them. We are not the party that is ideological. We do not believe that these key industries should be run by politicians and bureaucrats, with decisions being made for short-term political gain rather than long-term economic considerations and prosperity.

The point has often been made in this debate that in some ways the steel industry is different: it is a large industry; it is too big for the private sector to run it efficiently and effectively. What drivel. Many industries throughout the world have major private companies within them and they are being run very successfully—for example, the aircraft, motor vehicle, and computer industries. There are British examples in all those industries.

I welcome the Bill and add my support to it. It will enable the British Steel Corporation to be added to the long list of privatisation successes that this Government have to their name. The quicker that privatisation takes place, the better.

9.30 pm

Mrs. Margaret Ewing

I am grateful for the opportunity to speak on Third Reading. I apologise to the House for the fact that I was not able yesterday to attend the first day of the Report stage as I was recovering from an illness. I have listened with interest to some of the comments made on Third Reading. I am concerned that there appears to have been little movement by the Government on the future of the steel industry since Second Reading.

The Government claim that they are listening to the views of the population, but it seems that in this case they have not listened very carefully, and certainly have not been seen to act. There is little recognition of the significance of the steel industry, not just in Scotland, but throughout the United Kingdom economy. Although I speak from a Scottish perspective, I understand the significance of the steel industry to many hon. Members' constituencies in England and Wales. I have listened to their views with respect.

There is a symbolism about the steel industry which is perhaps difficult for many people to take on board. Symbolism may be something which many people do not accept should be argued in the House. However, the symbolism of British Steel is something that we should understand. If the Prime Minister talks of particular items of legislation as being flagships, she is talking in symbolic terms. When we talk about this industry, why cannot we place a similar emphasis on the symbolism of it to many parts of the United Kingdom?

I do not speak as a sycophantic follower of the idea of public ownership. My party has always stood for a combination of private and public ownership. Over the years, when there has been nationalisation and centralisation of various public assets within the United Kingdom, too often they have been at the expense of places such as Scotland, Wales or the north of England.

We are seeing almost the reverse of that coin in the privatisation of the steel industry, when I believe we shall see a continuation of centralisation. There is little doubt in my mind that privatisation will mean that the steel industry will fall into the hands of the people with money in this country—the people in the south-east of England. After all, that is the money centre of the economic world. The Government are more concerned with profits than with people. But we are talking about the future of the people employed in the steel industry.

I have not heard throughout the Second Reading, Committee, Report or Third Reading stages anything from the Government that convinces me that the interests of the people working in the steel industry are being taken to their heart. We are almost playing a Monopoly game, where the Government are saying to the workers in the steel industry, "This is a Monopoly game. Do not pass go; do not collect your shares; go directly to the unemployment benefits office." That is not the sort of message that should come from this House. Many people who work in the steel industry fear that the privatisation of the industry will mean further unemployment. We heard earlier that 134,000 people have been made redundant in the steel industry since 1979. How many more people's jobs will be lost as a result of this legislation?

In all seriousness, I advise Conservative Members to remember what happened in the wake of the closure of Gartcosh in Lanarkshire. One of the more senior members of their party, a former chairman of their parliamentary candidates committee, resigned. He was also the proponent of the idea that Conservative policies should be expounded more seriously and effectively in Scotland. However, he resigned because of the closure of the Gartcosh steel works. That man was lain Lawson who, together with the hon. Member for Motherwell, North (Dr. Reid) and many other people, walked to Downing street to argue against the closure of Gartcosh.

The kind of arguments that have been put forward by Conservative Members during the passage of this legislation will ensure not only that people of the calibre of Iain Lawson will resign from the Conservative party and join the Scottish National party, but that the Conservative party will not revive in Scotland. I am sure that the hon. Members for Motherwell, North and for Motherwell, South (Dr. Bray), who have spoken so eloquently in all the stages of this legislation, have echoed the sentiments of many people in Scotland that the Conservative Government are not holding out any hope for the steel industry in Scotland.

As I have said, I am not taking a sycophantic approach to the idea of public ownership. However, I believe that the steel industry in Scotland did have a future in public ownership and that, by putting it into private ownership, the Government are tolling its death knell. For that reason, my colleagues and I will vote against the privatisation of the industry and against the Bill because we have heard nothing in the last few months to give us any confidence that the Government are holding out hope for people in the Scottish steel industry.

9.37 pm

Mr. Geoffrey Dickens (Littleborough and Saddleworth)

It is important that hon. Members remind themselves that before the Conservative Government came to power there was no hope for the continuation of the British steel industry. The industry was uncompetitive. It took about seven man days for every tonne of steel produced, compared with three man days for South Korea and Japan. People who sought to win competitive orders from around the world sought to buy their steel from British Steel. They asked British Steel to sharpen its pencils and get the price right so that they could buy from it, only to find that British Steel could never match the prices that could be obtained abroad.

British Steel was on a slippery slope. The taxpayers were, if I remember correctly, putting about £600 million a year into the steel industry in subsidies. That was unfair to the private steel industry, which was having to compete against the subsidised national steel industry.

As a commercial director, I have personal experience of trying to buy many thousands of tonnes of steel from British Steel. I wished to place my orders with British Steel, but I found that it could not match foreign prices. I had to win international contracts abroad against fierce international bids. We won those contracts, but we had to get the steel at the right price to meet the bid price with which we had won the contract. Until Mr. MacGregor was appointed and sorted out the steel industry, British Steel had no hope of survival.

I remember the day when we voted £75 million to help soften the blow of redundancies and to enable proper entitlements and rewards to be given to those who had lost their jobs. We could not afford to have overmanning and restrictive practices, because they would not allow us to compete with the rest of the world.

Opposition Members have short memories. When I first became a Member of this place I remember that the Chamber was packed when there was a steel debate. On those occasions the Opposition Benches were full. Since then the credit of Opposition Members has been lowered and we have only a handful of Opposition Members in their places for this important debate.

I want to be fair to the Opposition because they have the next business and I am aware that if I detain the House I shall be losing them precious time. I wish to be brief, but the clear message must be issued that if it had not been for a Conservative Government there would have been no hope for our steel industry. The industry now has a rosy future. There is staff security, and steel is being delivered at the right quality and standard and at the right price. That is accompanied by a good after-sales service. All these elements are now right because a Conservative Government came to power and had the guts to ensure that the industry was sorted out. It has been sorted out to such advantage that it is ready for privatisation. Let there be some entrepreneurs and risk takers moving into British Steel. Let us give the workers a better future, along with the industry and the country, by voting for the Third Reading.

9.42 pm

Mr. Bell

It is always a pleasure to be called to speak after the hon. Member for Littleborough and Saddleworth (Mr. Dickens), a future Prime Minister, has spoken. I shall follow with great interest the hon. Gentleman's career over the next few years.

It is right that the authentic voice of Teesside should be heard this evening. The hon. Member for Darlington (Mr. Fallon) represents the authentic voice of Durham. I want the authentic voice of Teesside and Middlesbrough to be heard so as to echo the roar from Ayresome park as the play-off takes place for the first division. As extra time is being played in Middlesbrough, so we come to the final in our debates on the Bill.

We have had an interesting debate, but it seems that the Chancellor of the Duchy of Lancaster and Conservative Back Benchers wish to speak about Opposition policies and how the Opposition will run the economy when we come to power rather than direct attention to the real reason behind the Bill. Although we have not had it explained to us by the Chancellor of the Duchy of Lancaster or Conservative Back Benchers, the Bill is before us so that the Government can secure another £2,000 million to assist the British economy and to keep the public sector borrowing requirement in credit rather than deficit. The Government have announced tonight that the PSBR is £925 million in credit, and their rush to get the Bill on the statute book reflects their desire to obtain another £2,000 million next year so that the books can be balanced.

I am reminded of the occasion when ICI's Sir John Harvey-Jones came to Middlesbrough when a local bank opened a new branch. When I asked, "What are you doing here?" he said, "I am here for the same reason as you, except that my overdraft is bigger." The British Government run no overdraft and ICI has an overdraft of about £5,000 million. A successful company is prepared to borrow to invest in its future, but the Government sell their assets and the shares of the British people to make money for those in the City, not for those who invest in industry on Teesside.

People on Teesside are interested in the Bill. The hon. Member for Corby (Mr. Powell) said that during the last election there was no discussion about the privatisation of the steel industry except for pension rights, but there is deep concern and anxiety on Teesside about the consequences of privatisation.

I remember going to the United States many years ago and seeing what had happened to the steel town of Birmingham, Alabama and the steel towns of Pennsylvania. There was no investment by the state, and the steel industry was left to run its own affairs as a private industry. Japanese competition came in and laid low those steel towns, decimating the industry and making thousands unemployed.

The hon. Member for Darlington referred to the possibility of greater private sector participation in steel in Darlington, but my hon. Friend the Member for Wentworth (Mr. Hardy) asked what would happen if the growth did not come about. Steel is a cyclical industry, and there would certainly be more redundancies. What will happen if a multinational firm buys this global outpost in Darlington and decides to close it down when the next recession arrives?

It is not true that people in the steel industry are asking what a future Labour Government will do; they are asking how they will fare under privatisation. What will happen when the investment does not come? What will happen to their jobs, their investment in their work and their future? Those are the questions being asked on Teeside and such concerns were never alleviated in Committee, when we never had a straight answer to a straight question from a Minister. Ministers read the briefs that had been prepared for them but made no positive statements to explain, highlight or illuminate the contents of the Bill.

I associate myself with the Opposition Front Bench. We shall oppose the Bill and bring forward our own common ownership proposals at the next general election. We shall see how our industries should be governed and run when the European single market arrives. We shall examine the future with some reflection and certitude and put people in the industry first, not the City slickers who are waiting for the shares to come on the market.

9.47 pm

Mr. Morley

Tonight we have heard no justification for selling British Steel, because British Steel stands wholly justified as it is. If it is compared with any private steel company in Europe or the rest of the world, it can be seen to be out-performing them. It is making more profit and is more productive than any of its rivals. How can Conservative Members argue that public ownership has been a failure, when the BSC is a monument to the success of public ownership? It is so because it was given the investment that it needed.

The reward for people who work in the BSC is a patronising pat on the head to show them how well they have done and a tip of £70 as they are shown the door to an uncertain future. While it remains in public ownership, the BSC has a guaranteed future, and so do the people who work in it. The supply of steel to our industry is guaranteed, as is long-term planning for industry. Now we are faced with uncertainty.

No Conservative Member can give any guarantee that the BSC will prosper as a privatised company. That is the BSC's reward for reaching profitability. Why throw it all away? It is wrong for the Chancellor of the Duchy of Lancaster to dismiss the £5 billion that have gone into British Steel as money that is to be forgotten and cannot be recovered. While the BSC remained in public ownership, that money would have been recovered because the taxpayers would have received the return on their investment that has been wiped out by the Government.

The case for public ownership has been proved and the Government have failed to make their case for throwing the industry into uncertainty. I point out to the hon. Member for Corby (Mr. Powell) that the argument about privatisation was very much an issue in my election. That is why Scunthorpe has a Labour Member of Parliament after eight years of Tory control. The people of Scunthorpe saw a Labour Member of Parliament as more likely to protect their interests and their future. They are not wrong and I am glad to be here arguing to protect their long-term interests because the Government do not care.

9.50 pm

Mr. Morgan

Conservative Members have presented us with a series of wondrous paradoxes. There has been an almost obsessive interest not in the purpose of the Bill but in what the response of the Opposition will be at the next election. Conservative Members seem to have invented a new principle. They seem to say that, since they did not put this measure in their manifesto, they have a right to claim that we must put some measure about steel in our next manifesto.

The hon. Member for Darlington (Mr. Fallon) said that in the steelworks in his constituency, the Darlington and Simpson rolling mills, one of the consequences of privatisation will be that his steelworkers will be able to govern themselves up north and will no longer have to refer to an overweight corporate bureaucracy in London. He told us that a 50 per cent. share in the Darlington and Simpson rolling mills was owned by Norcros. He also told us with great pride that the chairman of Norcros is the hon. Member for Wokingham (Mr. Redwood). When his steelworking employees want to see their chairman and do not want to see anybody from an overweight bureaucracy down south, they will merely have to come to London. In between his demanding duties as an hon. Member and his duties for Rothschilds, the hon. Member for Wokingham may be able to spare five minutes of his time. That is a wonderful example of UDI for the north of England.

We had a wonderful last-minute intervention by the hon. Member for Littleborough and Saddleworth (Mr. Dickens). He was not seen in the earlier part of the debate and was not in the Committee, but he wanted to demonstrate his expertise in how to make corporate bodies lean and hungry. His eagerness to do that was more than I am prepared to speculate.

Mr. Dickens

I have a great affection for the hon. Member for Cardiff, West (Mr. Morgan), particularly as he gave way. The hon. Gentleman mentioned his hon. Friend the Member for Workington (Mr. Campbell-Savours) but I think that he meant my right hon. Friend the Member for Woking (Mr. Onslow) I would not like to steer the hon. Gentleman in the wrong direction.

Mr. Morgan

The right hon. Member for Woking (Mr. Onslow) sits on the Government side and my hon. Friend the Member for Workington (Mr. Campbell-Savours) normally sits behind me and I was perfectly clear on identity.

The Chancellor's speech was the most paradoxical of all the speeches about the purpose of the Bill. He said that its purpose is to stop politicians interfering incompetently in the industry. We realise what he meant and it was perfectly clear from his speech that he takes no interest in this industry. The Fe content of his speech was about 30 per cent. He attempted, as all good lawyers do when they have a lousy case, to use the ad hominem argument. He simply attacked the Opposition and attempted to demonstrate his new-found desire to be the Vinny Jones of the Government Front Bench.

The Minister spoke about the steel industry for about one third of the time. It is obvious from that that the Government are not interested in the steel industry. They are saying that they will be happy to get rid of it now and that it bores them. They do not want to know about it and if they can get any kind of return for it they will get shot of it. They say that, even though it was not in the Queen's Speech or in the manifesto, they want to get rid of it now. They are saying that the industry does not interest them in the long, short or medium term.

9.53 pm

Dr. Reid

As my hon. Friend the Member for Cardiff, West (Mr. Morgan) has said, we have seen some extraordinary spectacles in the debate. When the hon. Member for Littleborough and Saddleworth (Mr. Dickens) rose I assumed that a witches' coven had been formed at Ravenscraig, because I do not remember him making a contribution or showing an interest at any earlier stages in the steel debate.

An even greater revelation was the hon. Member for Darlington (Mr. Fallon), who attempted to shroud his support for the Bill in calls for decentralisation, devolution and at one stage workers' participation. He stopped just short of all power to the Soviets. None of those reasons will be accepted by the Opposition as the real reason for the Bill. No reason at all for it was to be found in the Minister's speech. I was looking for a word to describe the Minister's speech. "Vacuous" sprung to mind, but I thought it was a little too substantial. There was nothing in that speech to justify privatisation of steel, and, as my hon. Friend the Member for Cardiff, West said, the Minister spent three quarters of his speech searching for solutions to the future problems of the industry by demanding answers from my hon. Friend the Member for Dagenham (Mr. Gould).

The Minister claimed that the Bill was well thought out, despite the fact that he did not know how the company was to be floated, when it was to be floated, what price would be asked or to whom it was to be sold. The process of the enabling Bill was described by my hon. Friend the Member for Dagenham as a mystery. That was a gross understatement. The Bill fulfils every criterion of Churchill's definition of the Soviet Union. It is a mystery within an enigma, wrapped up in a riddle. That applies to both the reasons and the process for the sale of British Steel.

The Minister told us that there was no write-off of debt, but a trading loss; but no write-down of the taxpayers' capital, but a restructuring. I thank the Minister for his advice. Tomorrow morning, I will phone up the hire purchase company to say that I do not have a debt, I merely have a continuing trading loss and I shall discuss with my bank manager the fact that I would like a restructuring of my mortgage to ensure that it is written off.

A more simple and straightforward word was used earlier. The Bill is a swindle. It represents half the public dividend capital value, a write-off of debts and a snub to the taxpayer. It is the product of prejudice and dogma, not of good, long-term policy thinking. It was not in the manifesto or in the Queen's Speech. The only justification for it was the Minister quoting a colleague saying, "At some stage, somebody once said it."

We also had the offer that one phrase in the Queen's Speech refers to "other measures". As far as we can make out, that would justify the declaration of war tomorrow by the Government, on the basis that it was in the Queen's Speech. The Bill is the Government's responsibility. They have refused every amendment. Should the predictions about Ravenscraig or the steelworks in Lanarkshire come true, the responsibility will rest fairly and squarely on the Government.

9.57 pm

Dr. Bray

In their different ways, both sides of the House want to he rid of the Bill, but it has some lessons for us. We need to give more attention to monopoly and competition policy and their effect on jobs and output as well as on profit. For the industry, the lessons are that it needs to give continuing attention to the rapid changes that are still taking place in the market, technology and the national and international economic environment and, above all, to give more attention to its people and the communities in which it lives.

The Minister and the House need to give more attention to our relations generally with the industry. It is a misapprehension to suppose that the mere act of privatisation discontinues that relationship. It is like supposing that a floating exchange rate abolishes foreigners. Even if the Chancellor of the Duchy of Lancaster shuts his door, his eyes and his ears, he will find that the chairman of BSC and his successors will come along to knock on his door about a dozen issues. This will not be the last steel Bill that comes to the House. Whatever the results of the next election, if only to win another 22 years before the next major steel Bill, I urge the House to reject the Bill.

9.58 pm

Mr. Atkins

We have had an interesting debate, and I suspect that the House will not wish me to detain it for long. I am rather sad that one of the Opposition Members who participated at some length in our Committee debates—the hon. Member for Great Grimsby (Mr. Mitchell)—cannot be here today. I am sure that he has a good reason for that. He would have enlivened the Third Reading debate in the way that he enlivened the Committee debates, largely by the number of fairy stories with which he regaled us. Members of the Committee may recall and the House may be interested to know about Godzilla and about the bardic steamroller to which he referred. That just about sums up the quality of the debate offered by the Opposition.

We have heard from the Motherwell mafia, the hon. Members for Motherwell, North (Dr. Reid) and for Motherwell, South (Dr. Bray), the harbingers of doom who last night, finding themselves pushed to a Division by the SNP, had to abstain on their own amendment. Such is the commitment and the concern about the so-called controversial issue. We heard about capitalism and labour from the hon. Member for Middlesbrough (Mr. Bell)—

It being Ten o'clock, the debate stood adjourned.