HC Deb 08 November 1990 vol 180 cc112-6 2.36 pm
Mr. Donald Dewar (Glasgow, Garscadden) (by private notice)

To ask the Secretary of State for Scotland what steps he is taking in the light of the announced closure of the Clydesdale steel plant and if he will make a statement.

The Secretary of State for Scotland (Mr. Malcolm Rifkind)

The proposed closure of the Clydesdale steelworks is a matter of great regret and a very serious blow for the town of Bellshill. There has been a general awareness that Clydesdale had been operating in a very difficult market and making losses for some time. The decision to close, while clearly unwelcome, is not therefore entirely unexpected.

Fortunately, Lanarkshire unemployment has fallen significantly in recent years—by more than 12,000 since 1987. But it remains too high and these job losses will be an unwelcome addition.

I shall be asking my officials, the Scottish Development Agency and the local enterprise company to consider urgently the consequences for the area and its needs. In the meantime the SDA study will consider the prospects for the steel sector in Scotland, including Clydesdale. I expect to learn of its emerging findings in the course of next month and British Steel has assured me that it would consider carefully any commercial opportunity that it may identify.

Mr. Dewar

Does the Secretary of State accept that today's announcement is a devastating blow to Lanarkshire and the Scottish economy, that it will be felt far beyond the borders of the town of Bellshill and that it is a tragedy for the loyal work force, who have fought so hard over many months to save the plant? Does he further accept that it is not enough simply to talk about how the blow might be cushioned and what ameliorative action might be taken? Does he accept that that is cold comfort and that we wanted some signs of activity from the Government that they were trying to preserve the plant and capacity in the steel industry, which the country may need in years to come?

The Secretary of State knows that the stewards, with strong, informed support, are pressing for an investment package, modest in scope when measured even against British Steel's profits this year, but designed to give the plant a competitive edge. Did he endorse and argue for that package in his contact with British Steel's top management or did he merely act as a courier passing on other people's opinions? Is he prepared to do his bit even now to attempt to reverse the decision?

Does the Secretary of State share my anger that British Steel should claim as justification for the closure that the mill at Clydesdale was out of date and obsolete, so using its own failings and lack of vision in its care to justify the closure? Is he prepared to use the Government's contacts even at this stage to search and search again for a possible buyer or partnership deal to save the plant? He proclaimed—I remember it vividly—that the best way to secure the future of the industry was privatisation. Does not he owe at least that to the work force? Is not he ashamed to admit that if the closures go ahead, tubes for the North sea will come from France, Germany or even Japan, indeed anywhere but Britain?

Mr. Rifkind

I agree with the hon. Gentleman that today's announcement is a sad blow for what has been a loyal work force. I met representatives on Monday when we discussed the plant's prospects. They discussed with me their proposals for investment, which I drew to the attention of Sir Robert Scholey when I saw him. Naturally, we have asked British Steel to consider any sensible commercial proposals for any of its plants in Scotland, as one would expect.

The hon. Gentleman asked whether one should search for a possible alternative buyer for the plant. I refer him to the study that is being carried out by the Scottish Development Agency, the point of which is to identify commercial opportunities for the steel sector in Scotland. It is important that British Steel is co-operating in that study. Contact has already been made between Sir Robert Scholey and Sir David Nickson, chairman of the SDA. We expect the preliminary views of the study next month. I hope that it will identify whether there are commercial opportunities and, if so, what they are. Clearly, if any progress is to be made, it is most likely to take place on that basis.

Dr. John Reid (Motherwell, North)

Does the Secretary of State even yet not recognise the devastation that will be wrought in the Bellshill and Motherwell area by this announcement? What sort of Christmas present is it for thousands of families and children from Bob Scholey? Does the Secretary of State begin to recognise the anger and betrayal felt by the workers, many of whom I spoke to this morning? Over the past few years the work force have increased productivity, reduced delivery dates and enhanced quality at a time when British Steel has been starving them of investment. Does he recognise that when British Steel says today that it is cheaper to buy products from abroad, it is simply because British Steel has refused to match the commitment of the work force with investment and retailing at the Clydesdale plant? No matter what the efforts of the work force, it is still cheaper to get those goods from abroad.

The Secretary of State talks about an SDA study, but he need not wait months. Let me give him the figures from the House of Commons Library. If the process continues at Clydesdale, Ravenscraig and Dalzell, there will be 40 per cent. male unemployment in the Lanarkshire travel-to-work area. The Secretary of State is presiding over the social and economic devastation of my constituency. If he does not pull his finger out and do something other than wring his hands, he will never be forgiven by the people of Scotland.

Mr. Rifkind

Until the latter parts of the hon. Gentleman's remarks when he became slightly emotive, perhaps understandably as he represents the interests of his constituents, I could agree with much of what he said, because I recognise the bitter blow that this must be for his constituents in Bellshill. He is correct to describe the work force as a loyal one, who have worked hard. It is indeed paradoxical when the plant is working fully and producing the products for which it is known and when British Steel has been so successful in becoming competitive and profitable in many other areas and in winning orders, that it seems unable to do so for this plant. I assure the hon. Gentleman that we have no intention of waiting months to find out what may be possible to alleviate the situation. We are already awaiting the conclusions of the SDA report and are determined to do what we can in co-operation with the local enterprise company, the SDA and others to alleviate the consequences of any unemployment that may be caused.

Mr. Alick Buchanan-Smith (Kincardine and Deeside)

Is not this just another example of death by a thousand cuts of the Scottish steel industry at the hands of British Steel? Before we go further and see even more of the industry whittled away, should not we put together the steel assets in Scotland and give someone else the opportunity through ownership and management to make a go of the Scottish steel industry in the interests of Scotland and of those who have devoted their lives to it?

Mr. Rifkind

That indeed may be an option which some may wish to pursue. It may be an attractive option, but, of course, it presupposes that there would be an interested buyer for the assets. The first stage is to consider whether there are commercial opportunities—I stress commercial opportunities—for this steel sector and that is what the SDA report will identify. If such opportunities are identified, we hope that British Steel, which has shown its willingness to co-operate with the study, will in the first instance seek to work them.

Dr. Jeremy Bray (Motherwell, South)

Is the Secretary of State aware that the surrender of the North sea market to imported tubes is a confession of abject failure by the Government and British Steel? Can he explain why the appropriate investment was not undertaken in the many years for which the Government were responsible for the steel industry and by British Steel since privatization? Is he aware that no action has been taken in Lanarkshire for the creation of new jobs since, six months ago, the Secretary of State announced an initiative for such job creation? Is he further aware of the misery caused by this first of many blows expected to fall on Lanarkshire?

Mr. Rifkind

The hon. Gentleman will know as well as I do that when British Steel was in public ownership, under either Labour or Conservative Governments, decisions on investment were taken by the company and not by the Government. Therefore, any question about a lack of investment is a matter for which British Steel, whether publicly or privately owned, must take responsibility.

Mr. Tom Clarke (Monklands, West)

Does the Secretary of State accept that this announcement is a devastating blow to the people of Clydesdale and Lanarkshire? Does not he regret supporting the privatisation of the steel industry, and does not he accept the consequences of that decision? Will he bear it in mind that in constituencies such as mine, which is next door to Clydesdale, the spin-off effect will be considerable and many firms that are already worrying about high interest rates will be deeply concerned? Finally, in the light of this tragic news for the people of Lanarkshire, does he agree that the time has come for him to cease playing the part of Pontius Pilate, which is as unacceptable as it is repugnant to the people of Lanarkshire in the modern world?

Mr. Rifkind

The hon. Gentleman and his colleagues would sound more convincing in their complaints about the privatisation of British Steel if the Labour party had not made it quite clear that a future Labour Government do not intend to return British Steel to public ownership. Therefore, it is less than convincing for the hon. Gentleman or his hon. Friends to make mealy-mouthed and unconvincing comments about the consequences of privatisation.

Mr. Malcolm Bruce (Gordon)

Does not the Secretary of State accept that this is a despicable decision by the management of British Steel, which is clearly hellbent on the destruction of the Scottish steel industry? Does not he acknowledge that this is not just a disaster for Scotland, but it is of no value at all to the United Kingdom to yield up its market share to foreign competitors against the background of our present balance of payments deficit Is not it time for him to take the lead with the SDA, the work force and the Scottish financial community, to do as the right hon. Member for Kincardine and Deeside (Mr. Buchanan-Smith) suggested and set up a company that can buy out the assets of Scottish steel, get the investment and give British Steel the competition that it needs and deserves?

Mr. Rifkind

We have already made it clear that we expect the Scottish Development Agency study to identify whether there are commercial opportunities. I have no doubt that the type of suggestion made by my right hon. Friend the Member for Kincardine and Deeside (Mr. Buchanan-Smith) will be one of the possibilities that the study may wish to consider.

Mr. Alex Salmond (Banff and Buchan)

What other country in the world, in the face of a huge and expanding market in the North sea, would shut down its indigenous steel industry? Is the Secretary of State aware that British Steel's share of the new Beryl export pipeline in the North sea is a mere 1 per cent? Does not it worry him that British Steel can make lots of money by importing other people's steel and retailing it in the United Kingdom? Why will not he press for a Monopolies and Mergers Commission inquiry into the abuse of monopoly power by British Steel? Does not this latest episode in the whole process of the rundown of Scottish steel show that steel is too important to be left to the private sector and belongs in the public sector where the strategic assets of Scotland could be properly protected and developed?

Mr. Rifkind

The hon. Gentleman appears to represent the only party in the House—indeed probably the only party in western Europe—that wants the steel industry to be controlled by Governments and by the state. It is a matter for great sadness that British Steel, which has been so competitive in many other areas, appears to have been unable to be competitive with the products that it produces at Clydesdale. That is a matter of regret and it is a point that the House is entitled to observe.

Mr. Robert Hughes (Aberdeen, North)

Does not the Secretary of State realise that this further butchering of the Scottish steel industry is the clearest demonstration that we have had of the futility and failure of the Government's hands-off approach? Does not he accept that the reason why there has been so much difficulty in the Scottish steel industry in the past 10 years is the narrow remit that the Government gave British Steel to pursue the quickest profit in the shortest possible time and the failure to look ahead and understand that there is not only the North sea, although that area is valuable for selling products, but the possibility of worldwide export markets, which the Government should have addressed long before now? Will not he see sense and understand exactly what he is doing and will he take action to protect the jobs and the manufacturing industry of this country?

Mr. Rifkind

Behind the hon. Gentleman's rhetoric it is difficult to identify the policy initiatives that he believes ought to be taken. As a member of a party with a new-found commitment to the European Community, he should be aware that its rules prevent direct Government assistance to the steel industry. If he does not know that, it is about time that he found it out.

Mr. Richard Holt (Langbaurgh)

May I remind my right hon. and learned Friend of Corby and Consett in my constituency, where thousands of jobs were lost in the steel industry? Thanks to privatisation and the expertise of the management, today we have a British steel industry on Teesside that is the envy of the world and, instead of whingeing, Teessiders have got on, working in co-operation with the Government so that today even hostile friends are saying that, despite any recession that may be in the air, Teesside is doing very well indeed, thank you.

Mr. Rifkind

I am sure that the whole House will be delighted that Teesside is doing very well. It would be unwise to believe that the interests of any one locality can best be served at the expense of others. We are a united kingdom, interested in the health of the economy of the United Kingdom as a whole.

Mr. Norman Hogg (Cumbernauld and Kilsyth)

Does. the right hon. and learned Gentleman recall that yesterday afternoon the Prime Minister, when addressing the House of Commons, chided the Leader of the Opposition for overlooking what she called the economic resurgence that we have brought about in the past 12 years"?—[Official Report, 7 November 1990; Vol. 180, c. 22.] In what context does the Secretary of State place the Prime Minister's remarks, given today's announcement? Where is the economic resurgence that he can be proud of?

Mr. Rifkind

I am happy to respond to the hon. Gentleman. My right hon. Friend was entirely correct. In Lanarkshire alone, unemployment has fallen by 12,000 over the past few years. Scottish unemployment continued to fall in each of the past few months. Prospects for economic growth in Scotland are still deemed to be encouraging by all the economic surveys that have been carried out. The hon. Gentleman appears to regret the fact that the Scottish economy is doing better at the moment than it has done for many years—that is something which he should take great pride in and not regret.

Several Hon. Members


Mr. Speaker

Order. I remind the House that this is a private notice question and that this matter may certainly be raised during the debate on the Queen's Speech by those who have not been called.