§ 2. Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry if he will make a statement on the future of the steel industry in the United Kingdom.
§ The Minister for Industry (Mr. Douglas Hogg)I have every confidence that there is a bright future for the United Kingdom steel industry now that all of it is in the private sector and free from Government interference.
§ Mr. MitchellA declaration of confidence from the Government in their present state is more a kiss of death than an endorsement. As domestic demand for steel is likely to be depressed because of what the Government are doing to deflate the economy, will the Minister have a word with the Chancellor of the Exchequer and tell him that the only way to encourage exports and to stop capacity being closed in this country is to get the pound down to a competitive level so that industry can compete effectively in Europe?
§ Mr. HoggI am glad that the hon. Gentleman's continued contact with the non-socialist world—he is, of course, a valued and I think well-paid employee of one of Mr. Murdoch's companies—has enabled him to ask the kind of question to which I am extremely happy to respond. As the House will know, as a result of Government policy there has been a transformation in the British steel industry. In the 1970s and early 1980s, the industry made huge losses and required vast subsidies. I am glad that it is now among the most profitable and productive steel industries in the world.
§ Mr. HoltWill my hon. Friend take it from one who has a steelworks in his constituency that the steel industry is doing extremely well and that one thing that would set it back would be for the Government once again to start interfering in the running of that great industry?
§ Mr. HoggMy hon. Friend is entirely right. There are various ways to measure the transformation, but one way is in terms of productivity. In 1980, the United Kingdom produced 84 tonnes per man year. I am happy to say that by 1988 that had increased to 347 tonnes per man year —a staggering transformation which has made the United Kingdom steel industry among the most productive and efficient in the world.
§ Mrs. Margaret EwingIf there is such confidence in the steel industry, and if such a transformation has been wrought, why has Sir Robert Scholey of British Steel twice refused to meet shop stewards from the Ravenscraig and Dalziel plants in Scotland? As there is every likelihood of a £700 million profit this year in steel, will the Minister monitor the level of investment in that industry in Scotland and ensure that meetings take place between Scottish representatives and the chairman?
§ Mr. HoggThere are no ifs and buts about the transformation. It is certain. Let me give the House some more figures which might also help the hon. Lady. In 1979–80 British Steel lost £1,784 million, which transferred into current terms is £3,359 million. I am happy to say that in 1988–89 British Steel made a profit of £593 million. In the first half of 1989–90, it made a profit of £423 million. The transformation is real; there are no ifs or buts about it.