British Steel (Hansard, 20 June 1990)

§ 2. Mr. Salmond
To ask the Secretary of State for Trade and Industry if he intends to meet the British Steel board and shareholders at the annual general meeting of British Steel.

§ 5. Mr. Canavan
To ask the Secretary of State for Trade and Industry whether he will meet the chairman of British Steel to discuss the future of Ravenscraig; and if he will make a statement.

§ 9. Mr. McKelvey
To ask the Secretary of State for Trade and Industry when he next plans to meet the chairman of British Steel to discuss the future of the Scottish steel industry.

§ 10. Mrs. Margaret Ewing
To ask the Secretary of State for Trade and Industry if he intends to meet the British Steel board and shareholders at the annual general meeting of British Steel.

§ 19. Mr. Maxton
To ask the Secretary of State for Trade and Industry if he has recently met the chairman of British Steel to discuss British Steel's plans for future capacity.

§ The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Nicholas Ridley)
With permission, I shall answer Question 2 together with Questions 5, 9, 10 and 19.

§ Mr. Maxton
On a point of order, Mr. Speaker.

§ Mr. Ridley
I met the chairman of British Steel—

§ Mr. Maxton
On a point of order, Mr. Speaker. I have just heard the Secretary of State say that he is taking Question 19, which is in my name, with Question 2 and others. I must inform you, Mr. Speaker, that this is the first that I have heard of this grouping. I might well not have been in my place at this stage—

§ Mr. Speaker
Order. That is a matter for departmental Ministers to decide. I have often heard hon. Members complain that their questions have not been brought before us. I have never heard anyone complain that his question will be called.

§ Mr. Ridley
I met the chairman of British Steel on 5 June and have no plans at this stage for a further meeting. Although I do not expect to attend British Steel's annual general meeting, I shall be represented.

§ Mr. Salmond
Has the Secretary of State read the comments attributed to Sir Robert Scholey in The Guardian this morning? The report states that British Steel has invested £100 million in a German steel plant, because after 1992 the United Kingdom will no longer be the centre of gravity for manufacturing in the European Community. Where does the right hon. Gentleman think that the centre of gravity lies for supplying the millions of tonnes of steel products that will be required in the North sea market throughout the 1990s? If British Steel is unwilling to supply the products from Scotland, will the right hon. Gentleman go to British Steel's annual general meeting and argue for those productive assets to be turned over to an international investor who would be willing to make a success of the Scottish operation?

§ Mr. Ridley
I am a very small shareholder in British Steel. I do not think that any views that I should express at the annual general meeting would carry much weight. British Steel is becoming an international company of great repute and success. The fact that it is extending its activities into the Community is something that the hon. Gentleman should welcome. It is not my job to second-guess how best to go about improving the company's performance.

§ Mr. Canavan
Will the Secretary of State condemn the chairman's failure to meet the trade union representatives at Ravenscraig and will he urge the chairman to do so now, instead of simply writing a secret letter to the Secretary of State for Scotland in a vain effort to try and justify the closure of the hot strip mill? Will the Government publish the contents of that letter, in view of the great public anxiety about what until recently was a publicly owned industry and British Steel's failure so far to give any public justification for the proposed closure, which would have a devastating effect on the whole Scottish economy?

§ Mr. Ridley
My right hon. and learned Friend the Secretary of State for Scotland and I have urged British Steel to discuss its proposals with and explain them to the work force and the trade unions, as the hon. Gentleman suggests. Secondly, my right hon. and learned Friend has requested British Steel to agree to the publication of the letter to which the hon. Gentleman refers. No response has yet been received, but the request has been made.

§ Mr. McKelvey
Nevertheless, is not it the case that recently a group of Scottish Labour Members briefed the Secretary of State for Trade and Industry on the devastating effect that the closure would have on the Scottish economy? Therefore, will he abandon this glaikit approach and adopt a more progressive approach? Will he say from the Dispatch Box whether he is prepared to line up fully with the Secretary of State for Scotland to lead the fight against British Steel and get it to reverse this scandalous, vandalous decision against the Scottish economy?

§ Mr. Ridley
Indeed, a group of Labour Members came to visit me and at the end of the day they said that they were grateful for the support that I had offered the Secretary of State for Scotland. The hon. Gentleman is 911 wrong on that point. The more I hear about the matter, the less I can discover what the difference is between the Government and the Labour party. The Labour party does not appear to have the slightest intention of wanting to renationalise British Steel, nor to make subsidies to rescue the Ravenscraig plant, nor to take the power to issue directives to British Steel. Our position is exactly the same and I cannot see what the argument is about.

§ Mrs. Ewing
Cannot the Secretary of State understand that his laissez faire approach is equated with a don't care approach in Scotland and that his hands-off philosophy means that he is washing his hands of the steel industry in Scotland? Given the point raised by my hon. Friend the Member for Banff and Buchan (Mr. Salmond) and the fact that British Steel is also considering an additional acquisition in Spain and joint ventures in France and West Germany, can the right hon. Gentleman tell us whether his Department ever takes Scotland into its consideration and whether the assets of British Steel in Scotland will be used to the advantage of the Scottish economy?

§ Mr. Ridley
The hon. Lady must direct her strictures at the Labour party in Scotland, which shares our view that the Government should seek only to examine carefully the arguments that British Steel advances, to respond to them and to discuss them with British Steel with a view, we hope, to winning British Steel over to our view. That is what the Government are doing and what the Labour party wants to do. The Labour party does not go anything like as far as the hon. Lady and the hon. Member for Banff and Buchan (Mr. Salmond). She should pursue her quarrel with the Labour party, not with us.

§ Mr. Maxton
Does the Secretary of State agree with the Secretary of State for Scotland that British Steel should reverse its decision to close the Ravenscraig strip mill? Can we have a clear answer that the Secretary of State believes in demanding the reversal of that closure decision?

§ Mr. Ridley
I am delighted to tell the hon. Gentleman that the parliamentary clerk in my Department rang the hon. Gentleman's secretary at 10.15 am with the information that his question was to be included in this group. I am sorry if the hon. Gentleman did not get the message. On his substantive question, I have nothing to add to what the House decided in a debate. The motion was passed and the Government are busy, actively pursuing it. That is the right answer to the hon. Gentleman's question.

§ Mr. Bill Walker
Does my right hon. Friend realise that many Conservative Members believe that commercial decisions should properly be left to commercial managers? However, we also believe that in a modern, dynamic economy, management should consult the workers fully and adequately, particularly when their production records have never been achieved before and are beating those of foreign competitors. If British Steel has no place for its Scottish plants in its future plans—it is perfectly entitled not to—it should honour its promise and put them up for sale now as a going concern.

§ Mr. Ridley
I entirely agree with my hon. Friend that this is ultimately a commercial decision for British Steel. I support his assertion that British Steel's efficiency is becoming formidable. It now produces 347 tonnes per man year, well above the EEC average of 330 tonnes. If it is to 912 remain at the head of the world league of steel producers, we must not unnecessarily fetter its commercial decision making. I have already agreed that it is a good principle that companies should consult their work forces and persuade them of the rightness of their decisions.

§ Mr. Holt
Does my right hon. Friend agree that it is a long time since British Steel was taken out of the public sector, away from inept Ministers making inept decisions that cost taxpayers millions of pounds per day? The money is now redirected into social services, hospital building and other sectors, instead of being squandered and wasted. This year, British Steel has a record profit of £733 million and is the envy of steel makers throughout the world.

§ Mr. Ridley
I agree with my hon. Friend that should be as inept as my predecessors in trying to judge the steel market or to run a steel industry. Those are not my skills.

§ Mr. Favell
My right hon. Friend will hear continuously from the Labour party, especially Scottish Members, about the—as they term it—deindustrialisation of Scotland. Does he agree that if the Scots were not so bellicose towards management trying to make proper management decisions, people would be more inclined to invest and remain invested there?

§ Mr. Ridley
As an English Borderer, I should not dare to express any views on the subject raised by my hon. Friend.

§ Mr. Quentin Davies
Is not it a most astonishing sign of the extraordinary turn-round that has taken place in British manufacturing industry in the past few years that British Steel, once regarded as the sick man of the international steel industry, should now be buying a venerable German company in what is traditionally regarded as the most sophisticated steel market in the world?

§ Mr. Ridley
I believe that our industry needs excellence, leading to domination of world markets. The House will agree not only that British Steel has done remarkably well in the short time since it was released from the public sector, but that none of us wants to do anything to hamper it from doing even better in future.

§ Mr. Malcolm Bruce
Does not the Secretary of State recognise that he has responsibility for both competition and trade policy? In those circumstances, can he be complacent about the fact that British Steel is a monopoly producer in the United Kingdom that can run down assets and deny them to a potential competitor that might service the market and keep down prices? Why does he stand by and allow British Steel to abandon markets in the North sea and Europe, which could be served by a Scottish-based competitor?

§ Mr. Ridley
Neither of the hon. Gentleman's hypotheses has yet happened. He will know that various people have written to the Director General of Fair Trading about the proposed closure of the strip mill. The director general is considering those representations and will give me advice. If I receive advice from him—as I am sure I shall—I shall consider it carefully when making any decision. One cannot presume a decision about closure or refusal to supply markets in advance of its being taken.

§ Mr. Oppenheim
Was not Ravenscraig originally built at the behest of politicians? Is not it also the case that 913 political meddling over the years has done a great deal of damage to the British steel industry? Bearing in mind the incredible record of British Steel's management over the past few years as opposed to the record of politicians, would not the best course be for the Government to let the management get on with its job?

§ Mr. Ridley
I confirm what my hon. Friend has said. The decision to build the steelworks at Ravenscraig was part of a policy of splitting the family silver in half, if I may put it that way. I also entirely agree with him that the reason for the recent success of British Steel has been the freeing of the management from constraints in order to allow it to get on with doing best what only it knows how.

§ Mr. Gordon Brown
Will the Minister confirm precisely that the Government's policy is to deplore the closure and to ask for it to be reconsidered with a view to the decision being reversed? Will he tell us and list precisely what he has done to implement that objective? Will he and the Secretary of State for Scotland now meet the board of British Steel to discuss the letter that the right hon. and learned Gentleman has received and will he refer the matter to the Office of Fair Trading and ask it to look at monopoly and restrictive practices? Will he conduct an independent assessment within government of the strip mill's prospects and will he end the do nothing, care nothing, listen to nothing attitude that characterises the performance of the Department of Trade and Industry in this matter as in everything else?

§ Mr. Ridley
Curiously enough, the hon. Gentleman must not have been listening because I have already answered all those questions. He has not answered my question, which I shall repeat. In what respect does the Government's policy differ from the policy of the Labour party—not that of the Scottish Nationalists? This is a row between the Scottish Nationalist party and the Scottish Labour party. Does he agree that Labour has no intention of renationalising British Steel, that it cannot subsidise it and does not have powers of direction? The Labour party should stop this discreditable conduct and end the pain that it is trying to inflict on the House.