HC Deb 16 May 1990 vol 172 cc872-4
5. Mr. John Hughes

To 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.

9. Mrs. Margaret Ewing

To ask the Secretary of State for Trade and Industry if he will list the principal regular subjects of discussion at meetings between himself and the chairperson and board of British Steel plc on which he answers to Parliament.

Mr. Douglas Hogg

British Steel is now a private sector company free from Government control. Over the last 10 years there has been a transformation in the fortunes of British Steel, which is now one of the most successful and productive steel companies in the world. I am confident that that success will continue in the future.

Mr. Hughes

Does the Minister acknowledge that the product of the Government's suicidal economic policies, which have resulted in catastrophically high interest rates, is the loss of the jobs of thousands of workers in the steel industry in Scotland and Wales? Will he explain what steps he has taken to counteract that effect? Is he aware that British Steel has only 2 per cent. of the market share in the Common Market, in which demand is increasing at 3 per cent? What steps will he take to ensure that the British steel industry will meet that demand?

Mr. Hogg

I am afraid that the hon. Gentleman has not done credit to what is an important issue. The plain truth is that the fortunes of British Steel have been dramatically transformed in the past 10 years and it is now one of the most successful steel-making concerns in the whole of Europe. We should not forget that between 1975 and 1985 the subsidies to the steel industry, expressed in today's money, were £14,430 million. I should have thought that the House would be pleased to note that British Steel is now in profit.

Mrs. Ewing

This is an extremely important issue and it is clear that the Minister is not responding to the extreme anger that we feel in Scotland today about the despicable and disgraceful announcement by British Steel of the proposed closure of the hot strip mill at Ravenscraig next year. Why is not the Secretary of State for Scotland prepared to come along and sit on the Front Bench to hear the points that hon. Members are raising today? We are talking not just about the loss of 770 jobs directly but about the heart being torn out of the communities of central Scotland and about the core being removed from the Scottish economy.

When was this decision reached? Is it true that it was reached by the board in March of this year? When did the Department know about it? When did it discuss it with the Scottish Office? When will we have an opportunity to look at this in more detail?

Mr. Hogg

The hon. Lady is being less than candid with the House. She has complained about the absence of my right hon. and learned Friend the Secretary of State for Scotland; she knows perfectly well that my hon. Friend the Minister of State, Scottish Office is on the Front Bench, and that there is a private notice question down for answer at 3.30 pm, to which my right hon. and learned Friend the Secretary of State will be responding. So it was less than honest of the hon. Lady to pose her question in the way that she did.

Sir William Clark

Does my hon. and learned Friend agree that the success of the steel industry is proof positive that privatisation is much better than Government control?

Mr. Hogg

Absolutely; my hon. Friend is entirely right. During the 1970s the British steel industry was virtually destroyed by the Labour party policies that were then in place. Since then, there has been a dramatic upturn in the fortunes of British Steel, which came from a considered decision to let its managers manage their business in accordance with commercial criteria.

Mr. Oppenheim

Can there he any better example of socialist economic mismanagement than the performance of British Steel in the 1970s? Is not it true that in the 1970s the Labour Government pumped huge amounts of state subsidies into British Steel, which merely encouraged it to build up huge and unnecessary surplus capacity? It was strike-bound most of the time; it was unproductive; and at one point it was losing £1 million a day. Contrast that with today, when British Steel is one of the most profitable and productive steel companies in the world, with one of the best-paid work forces in Britain.

Mr. Hogg

My hon. Friend is entirely right. He referred to losses, and the House will wish to know that in the period 1979ߝ80 British Steel lost—in today's money—£3,359 million. In the same period the United Kingdom steel industry was, I regret to say, at the bottom of the output league: output per man was about 160 tonnes, whereas we are now third in the ranking with output per man at about 347 tonnes.

Dr. Reid

On this of all days, the fact that the Secretary of State for Trade and Industry is not at the Dispatch Box now is a shameful disgrace. He cuts an ever more irrelevant and pathetic figure. Does not the Minister begin to understand the feelings of bitterness and betrayal in the Motherwell area? He will be the target of those feelings, and deservedly so. Why did not he heed our warnings about privatisation? Why did he go ahead despite those warnings and why has not he lifted as much as a little finger to argue for investment at Ravenscraig? Will he have the guts to admit that his complacency was wrong and give a guarantee that he will stand alongside Opposition Members who will fight to the end to reverse the decision taken this morning by British Steel?

Mr. Hogg

The hon. Gentleman's observations simply prove that the Labour party has learned nothing at all about the proper approach to industrial policy. I repeat to the House that between 1975 and 1985 subsidies to the British steel industry, in today's money, amounted to £14,430 million. That is a disgrace. The industry is now profitable and its output is among the most remarkable in Europe. That is a tribute to the process of privatisation.

Mr. Dickens

Does my hon. and learned Friend agree that there are as many people working for British Steel today as there were 10 years ago? The British taxpayer was putting £600 million a year into British Steel. Today it is making £800 million profit.

Mr. Hogg

My hon. Friend is entirely right to draw attention to the radically changed productivity record of British Steel. He is also entirely right when he says that what was a catastrophically loss-making industry is now profitable. We should be proud of that and not try to put back in place policies pursued by the Labour party that led to disaster.

Mr. Gordon Brown

Will the Minister explain how privatisation has ensured the future of Ravenscraig and the strip plant? Is not he ashamed to come before the House as the "do nothing" Minister who has simply walked away from his responsibilities to the steel industry? Will he confirm that the Secretary of State has not only refused to answer questions today but has failed to meet British Steel? When the chief executive of British Steel came to the Department of Trade and Industry yesterday no Minister bothered to meet him and he was met by only a few officials. Will the Minister now meet British Steel and demand that it explains itself? Will he call for the additional long-term investment that is now needed for a long-term and viable future for the steel industry in Scotland, England and Wales? How much more of Britain's manufacturing industry will he betray before he ends this dereliction of duty?

Mr. Hogg

I must say to the hon. Gentleman that I find his ranting profoundly depressing. Clearly, he has not understood or has not listened to any of the facts that I have given to the House. When the Labour Government were last in power the steel industry made a loss, in today's money of £3,359 million. That was a result of the type of policy—if the hon. Gentleman has one—that he is now calling for—that is, massive intervention. As the hon. Gentleman well knows, my right hon. and learned Friend the Secretary of State for Scotland has been in the far east selling Britain most effectively as a manufacturing country for inward investment. He also knows that my right hon. and learned Friend is coming to respond to a private notice question. The hon. Gentleman is a Scottish Member, so he would be the first to complain if some other Minister were first to make such a response.